Photo G-Garden StateNewark, NJ, December 4, 2020. A lawsuit filed by former employees of NY Waterway, which operates ferry vessels between New York and New Jersey, claims the company illegally dumped raw sewage, oil, fuel, coolant and other pollutants into New York harbor and surrounding waters for years while operating a fleet of 30 vessels that carry up to 30,000 passengers a day.

See the recent NY Times article.

Download the Amended Complaint.

In a recently unsealed complaint filed in the United States District Court of New Jersey, former NY Waterway fuelers and overnight mechanics Rafi Khatcikian and Ivan Torres allege that the company knowingly and intentionally forced them to discharge hundreds of gallons of liquid pollutants as well as batteries and aluminum shavings into the Hudson River, East River, Upper New York Bay, Lower New York Bay and Raritan Bay.

The complaint alleges that NY Waterway, under contract to the City of New York and Goldman Sachs, dismissed the concerns and complaints of the plaintiffs in order to cut costs, boost profits and remain on schedule. The company allegedly failed to maintain equipment designed to safely dispose of the pollutants and regularly told the plaintiffs to “get the job done” and lie about the illegal practices if asked, according to the suit. Both were threatened with termination if they took their concerns to management, and ultimately Khatcikian was fired for doing so, the complaint alleges.

“These brave defenders of the public interest are admitting their own wrongdoing in order to stop NY Waterway from further polluting the harbor and other local commercial and recreational waters,” said Michael D. Fitzgerald, co-counsel for plaintiffs. “They lost their jobs because of NY Waterway’s illegal practices, and then decided to put the interests of 15 million residents over their own futures. They are true environmental heroes.”

NY Waterway, EPA’s Green Dye Spotted 10-03-2018 at 04.22.53 (adjusted)According to the complaint, videos and photographs taken by the former employees show workers dumping sewage through a hose thrown over the side of ferries and illegally dumping it directly into the Hudson River from the holding tanks. In one video, dye provided by the EPA to track the pollution is shown billowing across the river as employees scramble to disperse the evidence by stopping and starting engines at the dock. The ferry depicted in the video was taken out of service and its GPS device turned off before being moved to a New York-based dock, the lawsuit alleges.

The complaint alleges that when the EPA returned a few weeks later, the bathrooms on ferries under investigation were either locked or removed entirely. The removal of the bathrooms allegedly took place just days after NY Waterway received notice of Clean Water Act violations.

“NY cynically put out-of-order signs on bathrooms and even removed toilets once they learn they were being watched,” said Fitzgerald.

The complaint further claims that NY Waterway’s ferries engaged in the act of “running open,” an illegal practice where ferries would discharge their holding tanks while sailing between destinations. NY Waterway allegedly also delayed repairs of equipment and cooling systems until it knew federal inspectors were due, causing hundreds and hundreds of gallons of toxic waste to pollute the river and surrounding waters daily. Gerald Robinson, a Halunen Law attorney who also represents the plaintiffs, commented: “this case was brought under environmental laws allowing citizens’ suits, as well as the False Claims Act, showing the critical role that whistleblowers play in eliminating environmental injustice.”

According to the lawsuit, NY Waterway and affiliated companies improperly received approximately $9.6 million from federal and state agencies since 2015, including from the Department of Transportation, Federal Highway Administration, Federal Maritime Administration, Federal Emergency Management Agency and New Jersey Transit. NY Waterway unlawfully certified it was in compliance with all environmental laws in order to receive the money despite knowingly and illegally discharging pollutants every day, the complaint alleges.

About the Law Office of Michael D. Fitzgerald: The Law Office of Michael D. Fitzgerald is dedicated to those who have taken up the individual challenge and have committed themselves to reporting fraud and waste. Based in New Jersey, The Law Office of Michael D. Fitzgerald handles various employment related matters related to whistleblower issues including False Claims Act and Qui Tam matters.

About Halunen Law: With offices in Minneapolis, Chicago and Phoenix, Halunen Law offers experienced legal representation to employees, whistleblowers, and those who have been wrongfully injured. Halunen Law has achieved a reputation as a fearless, tenacious and successful plaintiffs’ law firm, with a laser focus on achieving justice for its clients. For more information visit halunenlaw.com.

If you feel you’ve experienced illegal action in your workplace, we encourage you to submit a Case Review Form to our firm. One of our attorneys will review your information, and you’ll receive a response from our firm in a timely manner. There is no charge for this confidential process. And, if we take your case, as a contingency-based law firm, there is no cost unless we win.

We’re here to help you navigate your lawful rights and ensure you get the treatment you deserve. Together, we can hold employers accountable and create a fairer workplace for everyone.

Here are some things you should know before stepping forward as a whistleblower.

1. Whistleblowing can be a challenging and lengthy process

Whistleblower cases often take years, and the consequences of blowing the whistle can upend your life and that of your family. Your integrity can be attacked, your reputation can be smeared, your livelihood can be impacted, and your employability can be adversely affected. Laws exist to protect, reward, and vindicate whistleblowers, but litigating under those laws and enforcing your rights is a challenge as well.

2. Whistleblowing can be a rewarding, fulfilling process

Nothing’s worth having if it’s not worth a fight. Whistleblowing can be immensely rewarding, even though sometimes difficult. Whistleblowers are often driven by a devotion to courage, a desire for a clear conscience, and concern for the public good. Financial rewards may be available to compensate whistleblowers for their efforts and injustices. And even when whistleblower cases do not result in a financial reward, they often bring about improvements and important changes in the offending company’s behavior. They also allow whistleblowers to sleep peacefully at night and look in the mirror without regret, knowing they did their part in uncovering and pointing government officials to misconduct that harms all of us.

3. There are several whistleblowing statutes, not one, all-encompassing law

More than 50 federal laws and a myriad of state and local laws protect whistleblowers from retaliation. Your rights and level of protection depend on the type of misconduct you are reporting, the procedures of the law(s) most applicable to you, what you disclose, when, and to whom. Before making the call, learn about which law fits your situation and gives you the fullest possible protection. The best way to do that is to talk with an experienced False Claims Act / qui tam attorney.

4. Public agencies and public policy endorse whistleblowing

Federal and many state legislatures recognize the vital contributions whistleblowers make in detecting corporate crimes and have enacted anti-retaliation and reward statutes. Many government agencies have special agencies to investigate reports by whistleblowers. Don’t rely on media stereotypes. Those who understand the importance of rooting out illegal conduct, understand that the courage of individuals like you is critical to the well-being of our communities. That is why laws exist to protect you.

5. Do not expect to remain anonymous

Some whistleblower statutes allow you to keep your identity secret indefinitely. Others, like the federal FCA and many state counterparts, begin with the case under seal, or not publicly available, for a period of time. However, the case will eventually be unsealed.  And sometimes companies under investigation can figure out a whistleblower’s identity by the nature of events underlying the case or by the kinds of information the government requests. In nearly every case, the case becomes unsealed, or publicly available, after the government notifies the court whether it will intervene. In short, prepare to be identified as a whistleblower.

The decision to become a whistleblower is a personal one that only you can make. Contact an experienced whistleblower attorney at Halunen Law for a free consultation to discuss the rewards and risks of a whistleblower case to help you decide.

NathanielS-headshot-300×300As an attorney with Halunen Law’s FCA Practice Group, Nathaniel Smith is determined to bring fraudulent conduct to light, and to justice. Having recovered millions on behalf of whistleblowers in both employment retaliation cases and qui tam whistleblower lawsuits under the False Claims Act (FCA), he is relentless in his pursuit. Learn more about Nathaniel F. Smith.

red-whistle-headIf you suspect that your employer or some other entity is committing fraud against the government, here are some things you can do to increase your chances of bringing a successful False Claims Act case.

1. Act quickly

Quick action serves the important purpose of stopping the fraud and the harm it is causing. In addition, every legal claim has a corresponding limitations period within which to pursue a claim. Those time limits vary depending on the law and the circumstances. If you wait too long, you may lose your right to bring a whistleblower case.

2. Retain and work with an experienced attorney

You must be represented by counsel to bring a False Claims Act case, and in any event, having an experienced attorney is crucial to the success of your case. It is also affordable. Halunen Law provides free consultations and represents whistleblowers on a contingency basis, which means our clients pay us a fee only if the case results in a recovery. To successfully bring a False Claims Act case, you need a law firm that knows the following: how to put your facts into a compelling narrative; how the government will evaluate and investigate your allegations; how to persuade the government your case has merit; how to help the government put together the case; and how to litigate the case on your behalf if the government decides not to. As the person best situated to provide relevant facts, your participation and cooperation in this process are vital and can impact any reward.

3.  Document the fraud promptly and properly

Successful False Claims Act cases are based on evidence, not speculation, hunches, or guesswork. Documenting the fraud or misconduct is an important way to strengthen the merits of your whistleblowing and the government attention it receives. But determining how to do so—such as what documents you are permitted to take, how you may or should access them, and whether you may secretly record conversations—present tricky situations that depend on complex legal and factual considerations. If you navigate these legal traps incorrectly, you can jeopardize your case and your rights or, even worse, end up violating the law yourself.

4. Report the fraud

In many cases, reporting the fraud can strengthen a False Claims Act case. But knowing how, when, and to whom you should report depends on the situation and should be discussed with an experienced attorney. Sometimes companies have reporting procedures or policies that provide information regarding what to include and to whom you should report, such as a manager, human resources, the legal department, compliance, or even a whistleblowing helpline. Other reports may be advisable depending on the circumstances.

5. Discuss your whistleblower efforts or intentions only with your attorney

Loose lips sink ships—and whistleblower cases. Under the “first-to-file” bar, the federal False Claims Act typically limits recovery to the first person to file a lawsuit. You may also be limited or barred from recovering an award if, before you file suit, someone else publicizes or brings the fraud to the government’s attention. Similar limitations may apply under state law. In other words, if you say too much to too many people, you can jeopardize (or lose altogether) your right to bring or receive an award in a False Claims Act case.

6. Be patient

It takes time to put together a False Claims Act case and present it to the government. And then, it will likely take the government much longer to investigate your allegations, compile evidence, persuade a company to settle, or litigate a case. Delays, extensions, and other frustrations are common in False Claims Act cases. Allow the process to run its course, and do not expect a quick resolution. However, once you have provided your facts to the government in a well-constructed False Claims Act claim, you will have the immediate satisfaction of knowing that you have done what you can do to bring the illegal conduct to the government’s attention.

For all of these reasons and others, contact an experienced whistleblower attorney at Halunen Law for a free consultation as soon as you become aware of conduct that may involve fraud against the government. That first step will give you peace of mind and important advice as to next steps.

LonL-600×600-300×300Lon Leavitt joined Halunen Law after a successful 12-year tenure as an Assistant United States Attorney in the District of Arizona, one of the largest and busiest federal districts in the country. In that role, he managed False Claims Act investigations and litigation on behalf of the federal government in a wide range of fields, including health care, defense and education. Lon is especially knowledgeable in health care fraud enforcement, having pursued cases successfully against hospitals, hospices, physician groups, and other health care providers. Learn more about Lon Leavitt and his work at Halunen Law.

Whistleblower law book and gavel in a court.The news in recent years has had many stories about “whistleblowers”—what they reported, what caused them to blow the whistle, and what happened as a result. Perhaps you have seen some sort of misconduct on the part of an employer, a corporation, a competitor, or a health provider. And you wonder “Am I a whistleblower?” or “What do I do?” Or perhaps you have already reported some wrongdoing and are wondering if you are now experiencing retaliation.

There are many kinds of whistles to blow, many incentives for blowing the whistle, and many protections for whistleblowers. The procedures and processes vary, depending upon which law offers the protection. This means that the wise thing to do if you are in this situation is to contact an experienced whistleblower attorney who can help you sort out what has happened and what to do.

Protection for Blowing the Whistle on Wrongful Conduct

A whistle can be blown when you are experiencing a personal employment situation that violates federal or state laws. For example, if you are experiencing discrimination at work because of your gender, race, or religious beliefs, you can report that discrimination. Federal and state laws generally prohibit retaliation for making the report. If retaliation occurs, there are actions you can take, including filing a lawsuit. A successful whistleblower claim of this type has the potential to deter employers from illegal conduct and, importantly, to make you whole, for example, by making up lost pay and compensating you for the emotional distress you have experienced.

Many federal and state laws prohibit retaliation for other types of whistleblowing, including reporting workplace safety violations, abuse of vulnerable adults, discriminatory conduct against other employees, illegal pay practices, and violation of other state and federal statutes. Federal and state employees often have special protections for reporting government wrongdoing, waste, fraud, and abuse. These anti-retaliation provisions provide similar “make-whole” relief to a whistleblower as described above.

Reward Programs for Blowing the Whistle

Federal and state legislatures have also enacted premiums on some types of whistleblowing to provide whistleblowers with money incentives to come forward and identify illegal conduct. These whistleblower reward programs typically involve reporting illegal conduct that cheats the government, taxpayers, or investors of money and in so doing also causes other harm. The rewards in these whistleblower programs are typically a percentage of money the government collects from the wrongdoers as a result of a report and may depend on the type and amount of assistance the whistleblower provides to the government. These awards can be substantial depending on the type of report that has been made. Finally, these reward programs generally have anti-retaliation provisions as well to protect employee whistleblowers.

Whistleblower reward programs include federal and state statutes (False Claims Act statutes) prohibiting fraud against the government in any area, including health care, defense procurement, small business programs and government grants. Significant tax fraud is covered by a separate IRS whistleblower statute. Rewards are also available to persons who report fraud that impacts investors in securities and those who participate in commodities futures. Corrupt foreign practices by corporations are also covered by a rewards statute (Foreign Corrupt Practices Act) that covers, among other things, bribery involving foreign governments.

These statutes recognize that the government cannot monitor all of its activities to identify where illegal conduct or fraud has occurred, and that individuals who observe the illegal conduct are in a much better position to assist the government in challenging that wrongdoing. Billions of dollars have been collected as a result of whistleblower actions under statutes described above.

When You Reach a Turning Point

It is daunting to reach a turning point because you have experienced or observed conduct that you cannot ignore. This is when you need experienced whistleblower counsel to help you understand your options and chart your course. Knowing which statutes apply to your situation and how to invoke them is obviously important along with many other issues. For example, it is important to know that some whistleblower programs allow the whistleblower to remain anonymous, and some do not, but that there is always a risk that a whistleblower will be identified. It is also important to know that blowing the whistle can take a long time, but that patience will bring satisfaction that you have done what you can and need to do.

Whistleblower laws empower individuals to challenge wrongdoing. Unethical, unlawful, and unsafe practices tend to get worse the longer they are allowed to continue. More people can be hurt, more taxpayer money can be wasted, and those who follow the rules can lose to underhanded tactics. By stopping wrongdoing, whistleblowers send the message to individuals and organizations that there are repercussions of illegal conduct, and they will be held accountable. Whistleblowers who feel this urgency to act provide a tremendous service to their communities, their employers, taxpayers, and their government. Halunen Law values the courage of those who step forward and is committed to providing them with wise, compassionate, and results-oriented counsel.

SusanC-headshot-300×300A Partner at Halunen Law, Susan Coler is a member of the Halunen Law False Claims Act (FCA)/Whistleblower Practice Group. She represents whistleblowers nationwide who challenge illegal corporate conduct, particularly fraud against the government. She represented a relator in an FCA claim against Abbott Laboratories that resulted in a civil settlement of $800 million (total settlement of $1.5 billion), the fifth-largest civil healthcare recovery ever achieved under the FCA.

Photo of a tall stack of documents with a warmly colored background.It is unusual for any plaintiff or relator to achieve a summary judgment ruling in its favor in any type of case. But in U.S. v. Dynamic Visions Inc., DBA Dynamic Visions Home Health Services, et al., — F.3d —, 2020 WL 4914069 (D.C. Cir. Aug. 21, 2020), the D.C. Circuit affirmed such a ruling in a False Claims Act (FCA) case, alleging that a home health care company submitted false claims for reimbursement to the D.C. Medicaid program. The Circuit’s opinion shows how a relator can succeed on summary judgment and provides other useful discussions on evidence, civil contempt, piercing the corporate veil, and the proper calculation of damages in a Medicaid FCA case.

The defendant, Dynamic Visions, utterly failed a routine government audit of its operations. A review of 25 randomly selected patient files revealed a lack of the required “Plan of Care” (POC) for patients. The files either contained no POC or had deficient POCs (e.g. lacked a physician signature, contained untimely or forged signatures, or authorized fewer hours of care than claimed in bills to Medicaid). Id. at *1. The federal government executed a search warrant at the business and the residence of the owner and company president, Isaiah Bongam. The ensuing investigation revealed Bongam’s funneling of money from the company into private accounts (including offshore in Cameroon). Id. at *2.

The government brought an action against Dynamic Visions and Bongam alleging FCA violations, and its complaint listed false billings for 25 patients that were not authorized by a valid POC. The defendants failed to cooperate in discovery, particularly in providing evidence that the patients had valid POCs, and claimed that the government had seized their documents, even though they had been given a disc containing searchable PDFs of all relevant documents. Id. at *2.

Because defendants produced no documents showing valid POCs for these patients, the government moved for summary judgment. When the defendants failed to challenge the government’s statement of facts, the court granted the motion. The defendants appealed. Id.

The D.C. Circuit affirmed, except it vacated a small subset of claims involving POCs that the government claimed were forged, and for which it found questions of fact remained. Id. at *3. Most useful in the opinion is the panel’s discussion of the sufficiency of the evidence showing—“beyond genuine dispute”—the knowing submission of false claims.

The government provided evidence showing how each file lacked the proper authorization. In response, the defendants offered only conclusory allegations that the files were adequately documented and generally referenced how they followed policies and procedures. The Circuit found that the defendants provided nothing on which a jury could decide in their favor; they did not even provide the claimed policy and procedure manual they referenced in their conclusory defenses. Focusing on the available “reckless disregard” standard for falsity, the opinion affirms the district court’s conclusion that  “‘even a cursory review’ of the files would have revealed the ‘rampant’ false claims,” thereby justifying summary judgment at least on reckless disregard grounds. See 31 U.S.C. § 3729(b)(1)(A)(iii). Id. at *4-5. Rejecting the defendants’ arguments that scienter could not be pieced together, the Court stated there was no need to aggregate individual knowledge because “any single person who looked at the patient files should have known that the company sought reimbursements unsupported by adequate POCs.” Id. at *5.

Practitioners may also find these additional discussions useful:

Civil Contempt: Citing a two-year history of discovery non-compliance, the Court affirmed the imposition of a contempt finding against defendants, precluding them from presenting evidence in their summary judgment opposition that they did not already produce in discovery. Id. at *6.

Piercing Corporate Veil: Besides evidence of a “unity of interest between the individual and the entity,” the opinion affirmed the district court’s conclusion that Bongam’s transfer of large sums of money to his personal accounts was compelling justification to pierce the corporate veil. This was particularly so because insulating the owner from liability here would be unjust. Id.

Damages and the Federal Share of Medicaid: The Circuit sent back the damages calculations because the district court had awarded damages based on the full amount of the unauthorized reimbursements, rather than the 70% share paid by the federal government. Id. at *7.

The defendant here may have had “dynamic visions” for its home health agency, but its failure to follow even basic protocols regrettably led it into the dark tunnel of FCA liability. The take-away for practitioners is the viability of relying on reckless disregard as a basis for seeking summary judgment on a proactive basis and the type of evidence that can result in success.

SusanC-headshot-300×300A Partner at Halunen Law, Susan Coler represents whistleblowers across the United States in many different industries who challenge illegal corporate conduct, including fraud against the government. As a Labor and Employment Law Specialist, Susan has also brought successful retaliation claims in connection with False Claims Act (FCA) /qui tam cases and as stand-alone actions. Learn more.

Photo of a silver whistle resting on the red and white stripes of the American flag. The public-private partnership envisioned by the qui tam provisions of the False Claims Act (FCA) is one of its most successful and powerful aspects, yielding billions of dollars in recoveries. The FCA permits the Government, the whistleblower, and their attorneys to cooperate—and they often do—when investigating and litigating FCA claims. But are there limits to that cooperation? Can government officials ask a whistleblower to secretly record conversations between the whistleblower and individuals who are under investigation but are represented by an attorney? The answer, according to one federal court, is “yes.”

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Halunen Law - Whistleblowers: Fraud's Biggest ThreatOne of the first and most frequent arguments defendants make in fighting qui tam allegations under the False Claims Act (FCA) is that the case brought by the whistleblower, or “relator,” is not viable because it is based on publicly available information, the relator is not an “original source” of that information, or both. On February 19, 2020, the First Circuit Court of Appeals issued an important decision clarifying that to qualify as an original source, a relator need not have participated in the fraud or observed it in operation. Instead, a relator may qualify as an original source if the relator sees or receives information that is suggestive of fraud, hears suspicious conversations, and discovers additional evidence of fraud through personal investigation. United States ex rel. Banigan v. PharMerica, Inc., No. 18-1487, 2020 WL 813258, at *8-9 (1st Cir. Feb. 19, 2020).

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A young man plays the trumpet in a band classroom setting as a girl plays the guitar beside him and another boy holds an instrument in the background. We often write about the more common protections for employees in Minnesota, such as protections against discrimination, sexual harassment, retaliation for reporting law violations (i.e. whistle blowers), and protections for employees who take medical leave. But, did you know that Minnesota also provides lesser-known protections to employees? For example, Minnesota law allows employees to take up to 16 hours of time off work to attend their child’s school conferences and activities each year and for each child.

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employers violate employee rightsAlthough Minnesota is an “employment at-will” state—meaning the employer may terminate an employee at any time for any reason—there are, in fact, exceptions to the rule. Since 1967 the Minnesota Human Rights Act has served as the State’s comprehensive employment rights law and provides a wide range of protections for employees. Yet even with the law in place, employers continue to violate employees’ rights in countless ways. Here are 20 of the most common violations for which an employee may seek monetary relief under the Minnesota Human Rights Act:

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A digital illustration of a red whistle with the silhouette of a face in the bowl of the whistle. A few years back, a news article reported that a meeting of corporate defense attorneys had called out whistleblowers as primarily “disgruntled employees.” This remark reflects a too-common perspective that whistleblowers are a nuisance rather than a contributor to the well-being of our businesses and our government. Far from being a nuisance, whistleblowers are champions of ethical conduct and play a powerful role in prodding businesses to do what is right. Are whistleblowers often disgruntled employees?  Of course. Read More…

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