U.S. Dept. of Justice Urges Federal Court to Allow $1 Billion False Claims Act Case to Move Forward Against Nelnet

The U.S. Department of Justice filed a brief in U.S. District Court for the Eastern District of Virginia rejecting Nelnet, Inc.’s contention that its settlements with the Department of Education (ED) bar Oberg’s qui tam action.  Dr. Jon H. Oberg, a former employee of the Department of Education, brought a qui tam seeking the return of approximately $1 billion that student loan companies obtained through false pretenses.

Nelnet reached a settlement with the Department of Education under which the company would stop receiving overpayments.  However, the agreement did not require Nelnet to return any of the nearly $1 billion in overpayments it had already received.  In its brief, the U.S. Department of Justice stated, “. . . it is clear from statutory and other authority that Congress has committed exclusive authority to settle claims of fraud, including FCA claims, to the Attorney General” and furthermore that Nelnet has not presented evidence that the Department of Education even intended to release the company from FCA liability.  For the full brief, click here.

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.
 

U.S. Court Denies Caterpillar Summary Judgment in SOX Whistleblower Case

On July 13, 2010, the U.S. District Court for the Central District of Illinois denied a motion for summary judgment in Schlicksup v. Caterpillar, Inc., allowing a Sarbanes-Oxley (SOX) whistleblower, Daniel Schlicksup, to proceed to trial. Schlicksup, a tax manager with twenty years of experience, alleges that he was involuntarily reassigned by his employer Caterpillar to a position in the Information Technology Department due to his disclosures about the company not paying U.S. taxes on one of its structures.

Judge Mihm applied the adverse employment standard for Title VII retaliation claims prescribed in Burlington N. & Santa Fe Ry. v. White, and concluded that the involuntary reassignment might lead to a loss of “career prospects” and therefore constitutes an actionable adverse employment action.  Click here for the court’s full opinion.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing employees in Sarbanes-Oxley whistleblower proceedings and have written numerous articles about the whistleblower provisions of the Sarbanes-Oxley Act.  For more information about TELG’s Sarbanes-Oxley Whistleblower Practice, click here.

SEC Grants $1 Million Reward to Whistleblower in Insider Trading Case

As reported by the Blog of Legal Times, the Securities and Exchange Commission (SEC) has awarded $1 million to Glen Kaiser and Karen Kaiser who blew the whistle on insider trading committed by Pequot Capital Management, Inc.  The Kaisers provided the SEC with emails between a Microsoft employee and a Pequot employee, David Zilkh.  Pequot agreed to pay the SEC civil penalties, including interest and disgorgement, totaling more than $27 million.

The new Dodd-Frank Act, which we blogged about here, requires the SEC to grant whistleblowers a 10% to 30% reward of the money recovered for information that leads to sanctions exceeding $1 million.

MSPB Rules that the Existence of an Investigation into Allegations Cannot be the Sole Cause for a Federal Employee’s Indefinite Suspension

On July 12, 2010, the Merit Systems Protection Board (MSPB) held in the case of Gonzalez v. DHS that the mere existence of a federal agency’s open investigation into allegations regarding a federal employee’s conduct cannot be the sole cause for that employee’s indefinite suspension.  The employee, Manuel Gonzalez, was suspended without pay indefinitely by the Department of Homeland Security (DHS) pending an investigation into allegations that he had committed domestic violence.  The MSPB further ordered DHS to cancel the indefinite suspension and pay Gonzalez back pay with interest.  Click here for the entire opinion.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing federal employees before the MSPB.  To learn more about the firm’s Federal Employee Representation Practice, click here.

Warwick Beacon Reports on Rhode Island Schoolteacher Whistleblower Case

On July 22, 2010, the Warwick Beacon reported on the O’Neill v. Warwick Public School District case in which The Employment Law Group® client, Mary Katherine O’Neill, testified that she was ordered by school administrators to change a top student’s grade.  O’Neill, a music teacher at Toll Gate High School for over 30 years, testified that she refused to change the grade, and as a result, she was harassed by the school’s principal, Steven Chrabaszcz, for two years before she was fired in August of 2008. 

The plaintiff is represented by Mr. R. Scott Oswald and Mr. Dave Scher, both Principals at The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.