The Largest Tax Reward in History

Our Client Received One of the Largest Tax Whistleblower Reward in World History of $104 Million

Bradley Birkenfeld broke the back of Swiss bank secrecy. He was the first Swiss banker to file a case under the IRS whistleblower law. The results of this whistleblower case was unprecedented. UBS bank (at the time the largest bank in the world) had to pay a fine of $780 million. They also had to close all known U.S. accounts, and for the first time in history, the bank turned over the names of 4450 U.S. taxpayers for prosecution in the United States. Mr. Birkenfeld obtained the largest ever individual qui tam whistleblower award in history, $104 million.
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Other Notable KKC Cases

Co-counsel on amicus brief submitted on behalf of the American Medical Association in U.S. v. Phillip Morris in support of holding tobacco companies liable under RICO. Appeals court upheld this historic use of RICO to find fraudsters accountable.
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Represented the Village Voice in establishing the national precedent for allowing journalists to attend pretrial depositions in cases impacting the public interest over the objection of the deponent.

This case was another early pioneering case challenging the legality of restrictive non-disclosure agreements (NDAs) that corporations widely used to silence whistleblowers. The firm’s challenge to restrictive NDA commenced in 1988. By 1995 we have convinced the Labor Department that such agreements needed to be fully struck-down, leaving the whistleblower free to continue to pursue his or her retaliation case and disclose safety concerns to the government. The Labor Department joined with the Kohn firm in arguing against the legality of settlement agreements with restrictive NDAs. The Fourth Circuit sided with the whistleblower.
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Represented amicus curiae in a case filed to the Supreme Court on behalf of a qui tam whistleblower. Justices unanimously ruled in favor of whistleblowers, finding that a ten-year statute of limitations applicable to whistleblower-initiated claims when under specific conditions. This decision was a significant victory for whistleblowers under the False Claims Act.

Between 2008 and 2012, the partners at KKC had worked extensively with Congress to improve protections for federal employee whistleblowers. In 2012, those efforts were successful, and Congress passed the Whistleblower Protection Enhancement Act (WPEA). However, the issue of whether or not the WPEA protections were retroactive was critical to the thousands of pending cases filed before its passage. Representing the National Whistleblower Center as an Amicus Curiae before the MSPB, the firm argued that the provisions of the WPEA broadly defining the scope of a protected whistleblower disclosure should be given retroactive effect as a “clarifying amendment” to existing law. The MSPB agreed with this theory and applied the provisions of the WPEA, expanding the scope of protected disclosures (along with other vital reforms), to all pending cases.

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Successfully argued appeal before the U.S. Court of Appeals for the Fourth Circuit expanding the protections afforded corporate employees under the Sarbanes-Oxley Act. The case set a positive standard regarding the right of employees to remove documents from their worksite.

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The KKC lawyers vigorously fought for the protection of internal whistleblowers, but the Supreme Court rejected these arguments. However, the ruling of the Supreme Court sent a clear message that SEC whistleblowers filing under the Dodd-Frank Act should report directly to the SEC to avoid retaliation. Read the amicus curiae brief and the court’s ruling.

In this case, the firm established an important precedent regarding the rights of temporary employees. In the nuclear industry, companies often hire employees to perform temporary “clean-up” work. These jobs can last only a few months. The whistleblower was fired for raising concerns, and could not obtain subsequent employment based on his bad reference. The Department of Labor ruled that although the job the whistleblower was fired from was only scheduled to last a few weeks, the whistleblower was entitled to damages arising from his inability to be re-employed doing similar temporary work. In other words, the company was liable to pay damages for all of the temporary jobs it did not hire him for, not just the one for which he was fired. The Labor Department Judge who heard the case ruled as follows:

 “It is beyond a doubt, that as a road technician, Complainant would go where he could find work. Had there been no prospects for future employment at the D.C. Cook plant, Complainant undeniably would have sought employment at another plant under contract with Hydro/Westinghouse. Complainant has demonstrated that similarly situated employees were regularly retained and rehired by Respondent. Therefore, Respondent is liable for back pay beyond the original term of employment.

This ruling increased his damages from less than $25,000 to $218,000 in back pay and $154,000 in front pay. The case established precedent on the rights of temporary workers to obtain damages for lost future employment caused by illegal retaliation.

The whistleblower lawyers at Kohn, Kohn and Colapinto represented, pro bono, the National Whistleblower Center in this early critically important whistleblower case. Before the False Claims Act amendments of 1986, numerous states had stronger whistleblower laws than the federal government. Corporations regularly argued that federal laws covering whistleblowers pre-empted states from also protecting these workers.

Corporations wanted to force employees to use weaker federal laws to protect themselves and prohibit them from using state whistleblower laws, which often included punitive damages. This fight came to a head in the Supreme Court in the case of Vera English, who lost her federal case because she failed to comply with a 30-day statute of limitations. She then attempted to use state laws to obtain protection. The Supreme Court sided with the whistleblowers, and after that, the federal preemption defense was all but dead in whistleblower cases.

Represented, pro bono, that National Whistleblower Center as an amicus curiae in this successful Supreme Court challenge to mandatory arbitration. The Court held that when a government agency (in this case the EEOC) files a discrimination or retaliation case on behalf of an employee a mandatory arbitration agreement cannot be enforced if the government opposes the requirement.
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The Gaballa case concerned a problem facing most whistleblowers who are not confidential: Blacklisting. Once an employee is branded as a “whistleblower,” it is often tough to get a new job. This case set a powerful precedent for whistleblowers, prohibiting any badmouthing of a whistleblower with future prospective employers. In the case, the whistleblower hired an agency to contact his former employer to determine what type of references it gave him. His former employer stated that Mr. Gaballa had felt he was the victim of “discrimination.” This bad reference triggered liability, and the whistleblower was awarded compensatory damages based solely on getting a bad reference. The company was also prohibited from giving future bad references.

The Garner case was hotly contested in the state courts of South Carolina. The case finally made its way before the South Carolina Supreme Court on the issue of whether or not a corporate employee at the Savannah River nuclear weapons plant (a federal installation) could sue under the state’s whistleblower law and obtain the right to a trial by jury and significant damages. The state’s Supreme Court ruled for the whistleblow