McCabe Rabin Helps Clients Who Report Fraud Against Governments
|Ryon McCabe and Adam Rabin|
Ryon McCabe and Adam Rabin help the good guys bring wrongdoers to justice. “Every year, our federal, state and local governments are defrauded out of billions of dollars by dishonest physicians, hospitals, imaging centers, contractors, business people and other cheaters,” says McCabe, shareholder and co-founder of McCabe Rabin, P.A. in West Palm Beach. “To combat fraud, the government encourages whistleblowers to report this wrongdoing.”
Individuals and companies who cheat the government are subject to penalties of up to three times the amount of their fraudulent billings, adds Rabin, shareholder and co-founder of the litigation firm. “A whistleblower who reports the fraud can receive a reward of 15 to 30 percent of the funds recovered by the government,” says Rabin. “But you have to be careful to follow the government’s procedure and requirements in order to receive that award.”
McCabe Rabin is one of the few firms in Florida representing whistleblowers, and the firm’s attorneys have handled qui tam cases “in the name of the government” throughout the state and country. McCabe is a former assistant United States attorney. “I love this area of the law, because I still feel like a prosecutor,” McCabe says. “Investigating the fraud and doing something good for the community is very satisfying to all of us at the firm.”
Both McCabe and Rabin are board certified in business litigation, and the firm’s practice includes securities arbitration and other types of business litigation.
Both are active in the legal profession and the community. Rabin is a past president of the Palm Beach County Bar Association and former chair of the U.S. District Court for the Southern District of Florida Bench & Bar Conference held in West Palm Beach. McCabe is immediate past president of the Federal Bar Association’s, Palm Beach County chapter, and a board member of Leadership West Palm Beach.
Handling Cases Under the False Claims Act
McCabe and Rabin remember the first False Claims Act case they handled approximately six years ago. “We were engaged in an LLC breakup between doctors in a specialty practice,” says McCabe. “During discovery in the state court case, we discovered that there might have been violations of Medicare regulations.
The attorneys then prepared a qui tam case under the federal False Claims Act, which prohibits submitting false claims, making false statements in connection with those claims, knowingly retaining or keeping any overpayments of government money, or conspiring to do any of those actions. The result was a $3.1 million settlement for the U.S. government.
“The False Claims Act was adopted into law during the Civil War when contractors sold shoddy goods to the Union army,” says McCabe. “It has proven to be one of the most successful laws ever passed, since the government recovers on average $20 for every $1 spent in prosecuting False Claims Act cases.”
Since that first case, McCabe and Rabin have handled a continuing stream of whistleblower cases involving fraud against Medicare, Medicaid, and other government agencies. As McCabe says, “South Florida is a hotbed for Medicare fraud with an active U.S. attorney’s office reviewing these cases.”
Other types of fraud include misrepresenting a contractor’s status as a small business, woman-owned business or minority-owned business in obtaining government “set aside contracts.” “A wrongdoer who gets the government’s business through false ownership can be assessed substantial penalties for the fraud,” says Rabin.
Under the False Claims Act, a whistleblower who has evidence of wrongdoing (called a “relator”) presents that evidence to federal prosecutors. The whistleblower also files a lawsuit that remains sealed while the U.S. Department of Justice investigates the case— a process that can take several years.
“It is always best for a whistleblower to call a lawyer first,” says McCabe. “The False Claims Act sets forth certain procedures that must be followed to report the fraud and receive a reward. There are many potholes to avoid.”
Rabin says it’s essential for a whistleblower to prepare thorough, well-researched (legal and factual) documentation of the wrongdoing before presenting the evidence to federal prosecutors. “The more work you do in advance, the better the chances the government will intervene in your claim” he says.
While much of the firm’s practice involves federal false claims, similar laws are in place to encourage whistleblowers to report tax fraud to the Internal Revenue Service (IRS), securities fraud to the U.S. Securities and Exchange Commission, and false claims to state and local governments.
“There is a misperception that whistleblowers are only after the reward money,” says McCabe. “In fact, most whistleblowers are honest and concerned employees who know their company is doing something wrong and refuse to go along with the scheme. Other whistleblower actions are launched by competitors, for example, honest physicians who see other doctors paying illegal kickbacks for referrals.”
Protecting the whistleblower
Whatever their motives, whistleblowers can be demoted, fired or subjected to harassment on the job. “Even though the case is sealed, eventually the name of the whistleblower will come out,” says Rabin. “Fortunately, the False Claims Act protects the whistleblower from retaliation with significant remedies from the employer.”
McCabe and Rabin handle retaliatory claims for employees who have been subjected to some type of punishment for their actions. “Any whistleblower facing some sort of retaliation should keep a personal diary or other records documenting the employer’s actions,” Rabin says. “Being able to show a pattern of retaliation is very helpful when filing a claim.”
Rabin also advises labor and employment attorneys who represent departing or terminated employees to ask about potential fraud. “Include a few questions like ‘Has your employer cheated the government?’ or ‘Do you know about any fraud being committed at your company’?” he says. “Otherwise, the employee may sign a release that complicates a future whistleblower claim.”
Looking back on the past decade, McCabe says the level of fraudulent claims has remained fairly steady. “Wherever the government spends money, you will find fraud,” says McCabe. “It’s the same old adage: Follow the money.”