NY Attorney General encourages whistleblowers to come forward

NEW YORK CITY, June 8, 2011 -- New York has the strongest whistleblower law in the country and is eager to put it to use to fight fraud against the government and financial fraud, said New York Attorney General Eric Schneiderman at a conference his office held today that included two Phillips & Cohen attorneys as invited speakers.

A Phillips & Cohen whistleblower case resulted in the largest recovery in a non-Medicaid fraud case under the New York whistleblower law, known as the New York False Claims Act. Sodexo paid $20 million to the state of New York to settle the "qui tam" (whistleblower) lawsuit, which alleged Sodexo illegally retained "off-invoice rebates" paid by food vendors from public schools and universities that were in effect kickbacks.

At the conference, the attorney general invited whistleblowers and their lawyers to bring cases to his office and promised to aggressively investigate and prosecute such cases. The conference, "Fighting Fraud Against the Government in the Empire State," focused on that message.

The New York Attorney General's Office also is open to creative ways to attack fraud by combining various laws, such as the New York False Claims Act, the state Martin Act (used to fight financial fraud) and antitrust laws, said a senior adviser to the attorney general.

In another comment that was reassuring for whistleblowers, Gregory Krakower, senior advisor to the attorney general, said that if whistleblower cases turn out to be without merit, whistleblowers will have the option to keep their court filing sealed forever.

"This unusual provision under the New York law shows New York's commitment to encouraging whistleblowers to come forward, a San Francisco attorney with Phillips & Cohen.

Under "qui tam" laws, whistleblower cases are filed "under seal," meaning they aren't known to the public. But once the case is settled or dismissed, the whistleblower lawsuit generally becomes public.

In a separate panel, Colette G. Matzzie, a Washington, DC, attorney with Phillips & Cohen, discussed her experience working with the NY Attorney General's Office on the Sodexo whistleblower case as an example of a successful qui tam partnership with the NY Attorney General's Office.

For more information about Phillips & Cohen's record, see P&C's Successful Whistleblower Cases.