Hagens Berman Blog

Whistleblower News: FEMA Contract, VIX, Healthcare Fraud

by HB Whistleblower Legal Team

02/07/2018
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FEMA Contract Called for 30 Million Meals for Puerto Ricans. 50,000 Were Delivered.

The mission for the Federal Emergency Management Agency was clear: Hurricane Maria had torn through Puerto Rico, and hungry people needed food. Thirty million meals needed to be delivered as soon as possible.

For this huge task, FEMA tapped Tiffany Brown, an Atlanta entrepreneur with no experience in large-scale disaster relief and at least five canceled government contracts in her past. FEMA awarded her $156 million for the job, and Ms. Brown, who is the sole owner and employee of her company, Tribute Contracting LLC, set out to find some help.

Ms. Brown, who is adept at navigating the federal contracting system, hired a wedding caterer in Atlanta with a staff of 11 to freeze-dry wild mushrooms and rice, chicken and rice, and vegetable soup. She found a nonprofit in Texas that had shipped food aid overseas and domestically, including to a Houston food bank after Hurricane Harvey.

By the time 18.5 million meals were due, Tribute had delivered only 50,000. And FEMA inspectors discovered a problem: The food had been packaged separately from the pouches used to heat them. FEMA’s solicitation required “self-heating meals.”  read more »

Justice Dept. Escalates Inquiry on Global Sports Corruption

United States prosecutors have issued grand jury subpoenas in a far-reaching investigation of international sports corruption, seeking new information about some of the biggest sports organizations in the world — including FIFA, the International Olympic Committee and the United States Olympic Committee — as well as the people who have successfully lobbied to host top global competitions.

The Justice Department is exploring possible racketeering, money laundering and fraud charges related to two track and field world championship events and the business executives who have consulted on bids for various other elite competitions, according to one of the subpoenas, which was obtained by The New York Times.

The subpoenas, delivered in January, have solicited documents, testimony and financial records dating to 2013. Since that time, the United States has won bids to host two major sports events: the 2021 track and field world championships, in Eugene, Ore., and the 2028 Summer Olympics, in Los Angeles. The subpoena did not explicitly refer to the Los Angeles Olympic bid. read more »

Former Florida football player convicted of $20 million healthcare fraud conspiracy

Monty Grow, a former University of Florida and NFL player who made a small fortune selling pharmaceutical drugs, took the unusual step of testifying in his trial on charges of swindling millions from a federal program that provides medical insurance for the U.S. military. read more »

New NGO Fights for Whistleblower Rights in Europe

For all of the attention on US and international cases, Europe has been home to some of the world’s most spectacular whistleblower revelations in recent years.

Antoine Deltour and Raphael Halet withstood criminal prosecution after exposing sweetheart tax deals secretly granted to multinational corporations by Luxembourg officials. Bradley Birkenfeld served three years in prison after disclosing mass-scale tax evasion enabled by the Swiss bank UBS.

Ana Garrido brought Spain’s political establishment to its knees by unmasking by a nationwide bribery, money laundering and tax evasion ring. Macedonia’s government collapsed after three police officers revealed illegal wiretapping of 20,000 people, including politicians, business owners, journalists and professors. The Bosnian mining company Tuzla Kvarc was terrorized after reporting a government bribery scheme.

For their efforts to serve the public interest, each of these people suffered great personal and professional losses. Their lives will never be the same.

Their disclosures, however, were all game-changers – not just because they uncovered billions of dollars in systematic looting and graft, but because they powerfully spotlighted the need for strong legal rights for whistleblowers. They didn’t just introduce “whistleblowing” to Europeans who previously had little or no concept of the idea. They made people across the continent understand the essential need for citizens to speak out against corruption. read more »

Regulators Let Wall Street Turn VIX on Its Head

Products tied to volatility make it worse for the market and individual investors.

The best thing you can say about sudden market drops is that they can point out the market's weaknesses and create a road map for regulators to clean up any excesses. The bad news is that regulators look increasingly uninterested in protecting investors from the market's potholes.

So on Tuesday, while it was still hard to know what was propelling the market's decline -- rising interest rates, inflation fears -- it was pretty clear what had made the market's drop worse: volatility indexes and the billions of dollars tied to them. It wasn't supposed to be this way. The CBOE's Exchange Volatility Index, commonly called the VIX, was supposed to make the market less volatile by giving investors a better picture of the possibility of a stock drop and the ability to hedge against it. Instead, Wall Street did Wall Street and managed to produce the opposite outcome -- the index that was supposed to smooth out volatility has made it worse. read more »