By reporting fraud involving government Covid-19 relief funds, whistleblowers play an essential role in ensuring that coronavirus pandemic relief allocated under the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, the American Rescue Plan Act and other government programs are being spent and directed appropriately.
Qui tam lawsuits, as allowed by the False Claims Act, are an important and effective way for whistleblowers to report and stop fraud involving government funds as well as fraud that takes advantage of states, government agencies and other entities during the Covid-19 pandemic.
Those who blow the whistle on securities law violations related to the coronavirus pandemic can do so confidentially through the Securities and Exchange Commission whistleblower program, which also offers whistleblowers protection from job retaliation and rewards.
Whistleblower attorneys Phillips & Cohen have the experience and track record to help those who are trying to figure out how to report fraud and abuse involving Covid-19 relief funds.
FRAUD INVOLVING CARES ACT, AMERICAN RESCUE PLAN ACT AND OTHER COVID-19-RELATED RELIEF FUNDS – INFO FOR WHISTLEBLOWERS
The government is spending trillions of dollars under the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, the American Rescue Plan Act and other programs to help big businesses, small businesses, hospitals, other healthcare providers, universities and other entities survive during the Covid-19 pandemic.
It’s important that those desperately needed funds are properly spent and that the entities that receive the Covid-19 relief funds are truly eligible. Entities that receive funds must comply with government terms and conditions, and applications for coronavirus funds must be accurate.
The government has limited resources to determine whether the recipients of the emergency loans and grants are truly eligible for the funds and whether the funds are properly spent. Whistleblower are needed to provide insider information about Covid-19-related fraud that the government otherwise would never discover.
Whistleblowers who know of fraud cases involving government and state coronavirus funds may be eligible for rewards under the False Claim Act. Some examples of the types of fraud that might qualify as False Claims Act cases are:
- Providing false information in an application for pandemic-relief funds.
- Receiving government funds for which the business or entity is not entitled.
- Using coronavirus assistance for improper purposes that aren’t allowed under the pandemic relief legislation or violate the terms and conditions of the government funding. For instance, certain coronavirus relief funds for healthcare providers may be used only to prevent, prepare for and respond to Covid-19 or to reimburse for lost revenues attributable to the coronavirus incurred on or after Jan. 3, 2020.
- Providing substandard or defective equipment – including personal protective equipment – pharmaceutical drugs or services to the government or any healthcare provider or other entity that uses government funds for those purchases or services.
- Falsifying test results from research funded by the FDA to get FDA approval for vaccines and other treatments for Covid-19.
- Paying kickbacks to get government contracts related to the coronavirus crisis.
- Charging unjustifiably higher prices for government procurement orders than for similar orders by non-governmental entities.
- Failing to comply with the Buy American Act and the Trade Agreements Act.
Whistleblowers must work with whistleblower attorneys to file qui tam cases. The government generally investigates the allegations in a qui tam lawsuit, as it is required to decide whether to join the case.
The False Claims Act protects whistleblowers from employment retaliation and provides rewards of 15% to 30% of the amount the government recovers due to a whistleblower’s qui tam case.
[Want to talk to an experienced whistleblower attorney about your case? Contact Phillips & Cohen for a free, confidential review.]
Paycheck Protection Program fraud – What whistleblowers Need to Know
The Small Business Administration’s Paycheck Protection Program (PPP) is a vital Covid-19 relief effort that is highly vulnerable to fraud.
The CARES Act and the Paycheck Protection Program authorized hundreds of billions of dollars in forgivable loans to small businesses for job retention and related expenses through the PPP. The program was designed to provide loans to small businesses to help them keep employees on the payroll and weather pandemic-related downturns.
PPP loans have two important characteristics:
- PPP loans must be used for payroll costs, interest on mortgages, rent and utilities.
- PPP loans may be forgiven if businesses spend the money on these expenses within a set period of time and dedicate at least 60 percent of the loan proceeds towards payroll expenses.
Because PPP loans are aimed at reducing the devastating toll of the coronavirus pandemic, PPP loans require minimal loan underwriting – such as confirming receipt of borrower certifications. This has left the critical program susceptible to fraudulent applications.
PPP borrowers who do not use PPP funds to retain workers and maintain payroll, lease, and utility payments, or who receive duplicate SBA funds might not have their loans forgiven by the SBA, and might be committing fraud and subject to “qui tam” whistleblower lawsuits.
COVID-19 AND HEALTHCARE FRAUD – WHISTLEBLOWERS NEEDED
Healthcare fraud is always a problem, and now many fraud schemes are taking advantage of the chaos and fears of the coronavirus pandemic.
Whistleblowers and their attorneys are critical to tackling healthcare fraud related to the coronavirus crisis and to protecting Medicare, Medicaid and other government funds that so many depend on for their healthcare and survival. They can stop the fraud by using the False Claims Act to file qui tam lawsuits.
Some examples of coronavirus healthcare fraud schemes that could be the basis for a qui tam case:
- Off-label marketing of pharmaceutical drugs or medical devices for Covid-19-related uses the FDA has not approved.
- Kickbacks paid to get referrals for healthcare services or medical supplies in violation of the Anti-Kickback Statute.
- Offering free Covid-19 tests tied to unnecessary medical tests or treatments that the provider bills to Medicare, Medicaid or other government healthcare program.
- Fraudulent telemedicine or telehealth bills, such as billing Medicare or Medicaid for medically unnecessary services or services that weren’t provided.
- Billing government healthcare programs for fraudulent Covid-19 treatments and preventative measures.
- Upcoding to take advantage of higher fees for treating Covid-19 patients on Medicare.
[Questions or concerns about being a whistleblower? Contact Phillips & Cohen for a free, confidential consultation.]
SEC WHISTLEBLOWERS AND COVID-19 FRAUD AND CORRUPTION
The SEC is spending significant time and resources on enforcement related to coronavirus fraud, but it needs the help of whistleblowers – particularly insiders who can provide detailed information about significant Covid-19-related financial misconduct.
Under the SEC whistleblower program, whistleblowers can confidentially report their information about Covid-19 fraud and corruption to the SEC. The law protects SEC whistleblowers from job retaliation and offers rewards ranging from 10 percent to 30 percent of the sanctions collected as a result of the information and assistance provided by the whistleblower and the whistleblower’s attorney.
Some of the types of Covid-19-related fraud and corruption the SEC expects to see include:
- Microcap fraud. Microcap stocks are particularly vulnerable to fraudulent investment schemes, including those related to the coronavirus crisis.
- Fraudulent statements about a company’s business regarding Covid-19-related matters.
- Market manipulation.
- Insider trading.
- False disclosures in financial statements.
- Bribes of foreign officials disguised as charitable donations and other violations of the Foreign Corrupt Practices Act.
- Financial disclosures or valuations that may attempt to hide previously undisclosed problems or weaknesses as coronavirus-related.
- Improper marketing and sale of complex structured products to retail investors.
- Failures to honor redemption requests at private funds or registered investment companies, which might indicate an underlying issue.
WHISTLEBLOWER ATTORNEYS PHILLIPS & COHEN LLP: 32 YEARS OF SUCCESS
Phillips & Cohen is the nation’s most successful law firm representing whistleblowers, with more than $12.8 billion recovered as a result of its cases. The firm’s whistleblower attorneys have won more than $1.1 billion in rewards for its clients. Phillips & Cohen represents whistleblowers in qui tam lawsuits (False Claims Act cases) as well as cases brought under the whistleblower programs of the SEC, the Commodity Futures Trading Commission and the Internal Revenue Service. www.phillipsandcohen.com