Shout out today to the whistleblowers of the world, who are subjected to the worst kind of insults when reporting fraud. Take yesterday’s front page New York Times story today about information uncovered through a False Claims Act lawsuit against the Harris School of Business.
This is a for-profit school owned by the Premier Education Group, which “owns more than two dozen trade schools and community colleges operating under several names in 10 states.” Both companies have been sued for “charging more than $10,000 for programs lasting less than a year,” where “school officials routinely misled students about their career prospects, and falsified records to enroll them and keep them enrolled, so that government grant and loan dollars would keep flowing.”
In a separate case in New Jersey, dozens of former Harris students say that the school lied about what professional certifications they would qualify for after completing their courses; some were given a brochure saying they could sit for a dental assistant certification exam — an exam that had not been offered for years. Premier settled a similar case a few years ago before it went to trial.
The former employees’ federal suit also charges that the school enrolled people who should not have been in its programs — like a student enrolled for massage therapy, though he had been convicted of a sex crime, which would prevent him from being licensed. They say the schools enrolled students who had not graduated from high school, though their programs required it, including some who presented diplomas from known fraudulent “diploma mills.”…
The most striking allegations against Premier involve students who were not capable of doing the work because they lacked the mental stability, academic skills or English proficiency, yet were kept on the books so the schools could collect their federal aid, which requires that a certain percentage of students make progress toward completion. When teachers gave them failing marks, the former employees charge, administrators changed the grades and falsified the attendance records.
Ms. Amaya, [one of the whistleblowers], said she was promoted by Harris, and then fired for insisting on following the rules.
The company’s response? To call the lawsuits “frivolous” and to question the motives of those who blew the whistle: “Jonathan D. Farrell, a lawyer for the company, said some of the people suing the company 'may have financial motives,' while others are resentful over being dismissed, and 'some are misguided.'"
So let’s be clear how effective the False Claims Act has been providing people the opportunity to blow the whistle on corporate fraud and abuse – so much so that the U.S. Chamber of Commerce has made it part of their mission to destroy this law, despite how much money taxpayers have recovered. (See, e.g., today’s story about the whistleblower lawsuit against Tenet Healthcare and some of its hospitals in Georgia and South Carolina, charging that obstetric clinics referred women to hospitals in exchange for kickbacks from fraudulent Medicare and Medicaid claims – a scheme that “went on for more than a decade.” )
But check out this shocking Washington Post story about “one of the nation’s largest government contractors,” which is “requir[ing] employees seeking to report fraud to sign internal confidentiality statements barring them from speaking to anyone about their allegations, including government investigators and prosecutors." This is according to a lawsuit just filed.
Attorneys for a whistleblower suing Halliburton Co. and its former subsidiary, Kellogg Brown & Root, said the statements violate the federal False Claims Act and other laws designed to shield whistleblowers.
“The apparent purpose and intent of the confidentiality agreements was to vacuum up any potential adverse factual information, conceal it in locked file cabinets and gag those with first-hand knowledge from going outside the company,” Stephen M. Kohn, an attorney for the whistleblower, wrote in the complaint.
Explains the Post,
Between 2002 and 2011, KBR was the largest U.S. contractor operating in Iraq and Afghanistan, winning nearly $40 billion worth of federal work, according to the U.S. Commission on Wartime Contracting in Iraq and Afghanistan. KBR has been the subject of numerous lawsuits and allegations of fraud relating to contracts with the U.S. government, according to the war commission and the Justice Department.
Tim McCormack, a lawyer who specializes in whistleblower cases, said that he has seen numerous confidentiality agreements but that the one used by KBR is particularly stark because it threatens employees with termination and possible legal action if they speak out.
“This is mostly about trying to scare someone into not talking,” McCormack said. “It’s very effective to say you will be fired or sued. This is a very big company with lots of resources.”
Let’s hope someone shuts this whole thing down, and fast.