Philip Morris Sheds Military Cigs FCA Suit At DC Circ.

False Claims Act allegations that Philip Morris overcharged the military for cigarettes got no help Tuesday from the D.C. Circuit, which said the claims were based on publicly disclosed information and the would-be whistleblower was not an original source who could overcome that fact.

Relator Anthony Oliver cannot get around the FCA's prohibition on whistleblower suits based on public information, because his allegations are “substantially similar” to a discrepancy — between Philip Morris USA Inc. prices for cigarettes sold to armed forces exchanges and similarly situated private customers — revealed in the so-called Iceland memo, a three-judge appellate panel ruled.

“Oliver’s attempts to distinguish the Iceland memo are unpersuasive. Although the Iceland memo predates the sale of cigarettes alleged in the complaint, we have found 'disclosures going back as far as 40 years prior to the relator’s lawsuit ... sufficient to disclose the practices which formed the basis of the relator’s suit,'” U.S. Circuit Judge Robert L. Wilkins wrote for the panel. “Accordingly, the time difference does not undermine the disclosure of Philip Morris’s general practice.” read more »

WHISTLEBLOWER SETTLEMENT NEWS:

Whistleblower awards: SEC under pressure or shifting stances?

A recent spate of whistleblower awards by the Securities and Exchange Commission is a signal the agency is no longer relying on businesses to police themselves, says an expert.

This month, the SEC granted its second-highest whistleblower award of more than $17 million to a former company employee whose detailed tip “substantially advanced” its investigation and ultimate enforcement action.

Other recent whistleblower awards, which began in 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, include:

• An award announced May 29 of more than $450,000 to two individuals for a tip that led the agency to open a corporate accounting investigation and for their assistance once the investigation was underway.
• A planned award announced May 17 of $5 million to $6 million, its third highest since the
• program's inception, to a former company insider whose detailed tip led the agency to uncover securities violations it said would have been “nearly impossible” to detect otherwise.
• An award announced May 13 of more than $3.5 million to a company employee whose tip bolstered an ongoing investigation with additional evidence of wrong doing that strengthened the SEC's case.

When asked to comment on the number of recent awards, an SEC spokesman referred to a statement by Sean X. McKessy, chief of the SEC's Office of the Whistleblower, about the May 20 action: “The recent flurry of awards reflects the high-quality nature of the tips the SEC is receiving as public awareness of the whistleblower program grows. read more »