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We’re trial lawyers. Our core competency – above everything else – is trying cases to juries. And we specialize in beating giants.

FALSE CLAIMS ACT CASES

Federal and State Law Protects Employee Whistleblowers Who Expose Fraud Against the Government.

Not only is your employer prohibited by law from firing you for reporting illegal activity – but you may also be entitled to a monetary reward from the government for exposing fraud.

Federal and state laws prohibit companies from defrauding the government, including healthcare fraud (e.g, Medicare, Medicaid, TRI-CARE, and more), defense contractor fraud, insurance fraud, securities regulation and financial fraud (e.g, fraud on shareholders), tax fraud, fraud on farm and education programs, and more.

Because nobody wants companies to be able to steal from taxpayer coffers, individuals who report fraud on the government are protected as whistleblowers under state and federal laws, such as the False Claims Act, Dodd-Frank Wall Street Reform and Consumer Protection Act, Sarbanes-Oxley, and more. These whistleblowers (sometimes called “relators”) are entitled to monetary rewards for exposing the fraud.

Violations of these laws and their state equivalents can result in serious monetary penalties. For example, in the case of the False Claims Act, judgments can be up to three times the amount of losses sustained by the government, plus civil fines. Additionally, people and companies can be subject to criminal prosecution for their perpetuation of the fraud.

The False Claims Act allows any individual to act as a whistleblower and sue a company or other person who is defrauding the government on behalf of the federal and/or state governments. In such cases, the whistleblower is referred to as a “relator,” and these cases are known as qui tam lawsuits. Qui tam is a latin for roughly, “in the shoes of the king.”

Any person who has evidence of a fraud occurring against state or federal government may act as a protected whistleblower pursuant the False Claims Act. Very often, individuals with the most knowledge are current employees of companies that are systematically committing the fraud.

For example, a billing or accounting specialist might be aware that a company is billing a government program or entity for services or products not actually provided. Another example might be where an employee is instructed by company management to routinely “up-charge” the government by billing for more than the service or product purchased.

Dodd-Frank, Sarbanes-Oxley, and more protect and allow for individuals who have information about violations of federal securities laws to be protected as whistleblowers. Such individuals may even be also entitled to monetary rewards for exposing securities violations.

For example, a salesperson at a publicly-traded company might discover that company management is lying to investors in an effort to drive up the company’s stock value. If this salesperson follows the proper steps to gain whistleblower status, they may receive a significant monetary reward for doing so.

The False Claims Act requires that individuals who wish to file a qui tam lawsuit to hire an attorney. The attorney will the work with the whistleblower to prepare the lawsuit and the information to be disclosed to the government. Qui tam lawsuits are initially filed “under seal,” meaning that nobody but the federal court, the U.S. government, and the whistleblower and their attorney know of the lawsuit.

During the “seal period,” the government investigates the allegations made in the lawsuit and works with the whistleblower and their attorney to gather more information. At some point, the government makes a decision as to whether or not to “intervene” in the lawsuit and prosecute the wrongdoers itself. If the government does not choose to do so, the seal is lifted and the whistleblower and their attorney may decide whether or not to prosecute the action alone.

For other types of fraud against the government actions, including for violations of federal securities laws, there are various different ways to gain whistleblower status (e.g., a tip to the SEC’s Office of the Whistleblower).

Individuals who are concerned that their employer or some other organization is committing fraud against the government should consider contacting an attorney who specializes in whistleblower law, so as to ensure that they are acting in accordance with all applicable state and federal laws and to ensure that their whistleblower status is protected.

A successful whistleblower who exposes fraud on the government may be entitled to a monetary reward in the form of a percentage (ranging from 15 to 30 percent) of the total amount the government recovers as a result of the tip.



 

Representative Case

Madia Law represented Danielle Ailts Campeau in United States of America, et al., ex rel. Danielle Ailts Campeau v. NeuroScience, Inc., et al., 13-811 (W.D. Wis.).

In October 2013, Madia Law contacted the FBI and the Department of Health and Human Services regarding Osceola, WI-based defendants Pharmasan Labs, Inc., NeuroScience, Inc., and Gottfried Kellermann (the founder and owner of the companies). Ms. Campeau alleged that the defendants were committing fraud on the United States and on the States of Wisconsin, Minnesota, and New York by selling illegitimate laboratory testing services, reporting illegitimate test results, and then using those baseless tests and test results to sell nutritional supplements under a different business name.

Madia Law subsequently filed, under seal, a lawsuit that led to a settlement and criminal plea deal. After three years of working with various federal agencies to investigate and prosecute the case, NeuroScience and owner Gottfried Kellermann pled guilty to felonies.

As part of the settlement agreement, the defendants paid a total of $6,188,769 to the United States government, of which Ms. Campeau and her attorneys collected a combined total of over $1.3 million. Additionally, NeuroScience and Kellermann were required to pay criminal fines, and Kellermann was ordered incarcerated via electronic home monitoring.

Healthcare fraud is a serious problem threatening public health and the integrity of taxpayer funds across the country. Employees of companies engaging in illegal activity in order to pad their coffers are in a unique position. Not only are these employees legally protected if they blow the whistle on their employer, but the government will reward them for doing so—in the form of sometimes-significant monetary compensation. Madia Law remains committed to assisting whistleblower employees like Ms. Campeau, who are critical in alerting the government to unsafe and fraudulent activity by healthcare providers and related services.

See also: United States Department of Justice Press Release

THE MADIA LAW WAY

We have a process that works in getting exceptional results for our clients. 

We are trial lawyers who prepare every case for trial from Day 1. Investigation and legal research are the first things we do, and we spend a lot of time on them. Because we haven’t filed the case yet, we have complete control – the defendant has no say and we want to use this time wisely.  We interview witnesses that can help us prove the case.  We’ll ask you for all relevant documents in your possession and review those carefully as well.  We also will spend some time conducting legal research about unique issues in the case.  We pull the jury instructions that the judge will ultimately charge the jury with after closing arguments at trial. 

Our next step is typically to send a demand letter to the defendant. In the letter, we thoroughly lay out: the facts surrounding the defendant’s misconduct; the applicable law (including statutory and case citations) that make clear that the defendant broke the law; an analysis of your damages and the defendant’s monetary exposure; a demand for a monetary amount to settle the claim; and an instruction to preserve all relevant evidence, including electronic evidence. The point of this letter is to give the defendant a chance to do the right thing and pay a fair amount before litigation, and to give the defendant an opportunity to present any defenses or evidence it wants us to consider before moving forward.  Sometimes we skip the demand letter if there are strategic reasons to move straight to filing, but we typically give defendants a chance to do the right thing.

If early negotiations fail, great – we file a Complaint and serve the defendant with it. A Complaint is a legal document that states the facts of what happened and alleges how the defendant broke the law. It formally starts the lawsuit.  Many lawyers draft complaints in a general and relatively vague way, just to get it done and filed – because that’s all that’s really required.  We take a different view. We view the Complaint as our first chance to tell your story to the judge, and we take it seriously. So we draft detailed complaints and include legal citations to statutory and judicial authority on unique points.  Sometimes we’ll include a number of exhibits, diagrams, or other demonstrative aids to help the Court understand our claims.  A secondary benefit of this approach is that defense lawyers reading the Complaint can become educated on the problems of their case and the state of the law – sometimes this leads them to reach out to us shortly after service of the Complaint to re-initiate settlement negotiations.  Of course, by that time, the price for settlement has gone up.

Some lawyers view written discovery as a necessary evil – something to get done and out of the way before depositions.  Not us.  Written discovery is a gift and an opportunity.  We spend a great deal of time crafting requests for documents and interrogatories (questions for the defendant to answer in writing) that are specific, detailed, and tailored to get what we need to prove our case.  Many lawyers – even great ones – think written discovery is a waste of time because defense lawyers typically answer them on behalf of their clients and can try to stonewall with legalese and objections.  We view this as a wonderful opportunity.  In our experience, most defense lawyers can’t help themselves when answering discovery: they over-state their defenses and make assertions that their clients will not be able to support in testimony. So we get to commit the defendant to defenses that they can’t back up, leading to contradictions, confusion, and chaos in their depositions later on.  We also use Requests for Admission – which many lawyers don’t.  The Federal Rules and Minnesota Rules of Civil Procedure allow us to ask defendants to “admit” certain facts.  We send them RFAs that are very difficult for them to deny.  Of course, they do it anyway, but that sets them up later for cost and fee-shifting, which the Rules mandate for defendants that deny RFAs that are later proven true.  And usually, we can get the defendants’ own witnesses to admit facts that their defense lawyers denied in RFA.  That’s a great situation that leads to more chaos and confusion on the defense side.

One last point on written discovery – we send multiple waves of it throughout discovery.  We typically send 3 or 4 sets of written discovery requests to defendants throughout discovery.  This compounds the problems for them, because the defense lawyers continue to overstate their defenses, but now run into contradictions from not just the defendant witnesses’ deposition testimony, but also their own previous discovery responses.  This makes for a great record that we can present to the judge at dispositive motions, and use for impeachment at trial.

This is our chance to question relevant witnesses, on the record with a court reporter (we typically videotape important depositions as well). We get to confront the defense witnesses with all of the evidence we’ve developed through written discovery and document production. By this time, the defendant put its witnesses in an impossible position through its written defenses, which are often untrue and indefensible.  So the witness has to either lie to support the defense, or admit it’s not true.  That’s a dilemma that works for our clients either way, no matter which option the witness takes.  We use depositions to expose contradictions, create a record for dispositive motions, lock witnesses into their stories so that we can impeach them later at trial, and sometimes, to show defense lawyers how hopeless their case is.  We often calls from defense counsel shortly after depositions of their clients, seeking to re-start settlement negotiations.

The defendant will usually make a motion for summary judgment after discovery, asking the Court to throw out the case without having a jury trial. Because we’ve hit discovery so hard – both through written discovery and depositions – this is a tough motion for defense counsel to write in our cases.  We draft our response for the Court and now get to bring everything together: the admissions, contradictions, nonsense, and obvious fact disputes that we’ve uncovered through discovery.  We tell a compelling story that wraps everything together for the Court and makes clear that the defense motion has to be denied, and the defendant needs to face a jury for its conduct.

Sometimes, we’ll even make an affirmative motion for summary judgment, asking the Court to grant judgment in favor of our client without a trial. These motions are generally rare for plaintiffs to make, because the defendant can usually point to some fact dispute on its intent or some other factor that necessitates a trial. But we make affirmative summary judgment motions significantly more than is typical for plaintiffs, and that’s because the work we put in during discovery helps build a fantastic record to do so.

After the Court denies the defense motion for summary judgment, the defendant has only 2 options: 1) do the right thing and pay you a fair amount to our client to settle your claim (usually much, much more at this point than the defendant could have paid at the beginning of the case to settle); or 2) face a jury for its conduct and risk an enormous verdict. This is the dilemma that we have been creating and forcing the defendant into for the entire case. We’ll engage in settlement negotiations at this point from a position of extreme strength, mainly because most defendants are (rightly) terrified of facing a jury to defend their conduct.

This is, candidly, our favorite part of the case – why we went to law school: to hold the powerful accountable before juries.  We prepare heavily for trial, including: detailed witness preparation, focus groups, and mock trials.  At this point, the potential outcomes and consequences for the defendant are much more severe than if it simply did the right thing at the beginning of the case and paid a fair amount to compensate our client for its misconduct.  As we advocate to the jury for our client, we’re also mindful of protecting the record so that defendants will be unsuccessful in attacking the verdict in post-trial motions or appeal.

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