Kohn, Kohn & Colapinto

Kohn, Kohn & Colapinto is a Washington, D.C.-based international whistleblower rights law firm specializing in anti-corruption and whistleblower law, representing whistleblowers who seek rewards, or who are facing employer retaliation, for reporting violations of the False Claims Act, Foreign Corrupt Practices Act, Dodd-Frank Wall Street Reform, Sarbanes-Oxley Acts, Commodity and Security Exchange Acts and the IRS Whistleblower law.[1]

Kohn, Kohn & Colapinto LLP
HeadquartersWashington, D.C.
No. of offices1
OfficesDupont Circle
No. of attorneys8
Major practice areasWhistleblower Rewards, Whistleblower Retaliation
Key peopleStephen M. Kohn, Michael D. Kohn, David K. Colapinto
Date founded1988
FounderStephen M. Kohn
Company typeLimited Liability Partnership
Websitewww.kkc.com

The firm's most notable client is Danske Bank whistleblower Howard Wilkinson, who exposed what many experts believe to be the largest money-laundering scandal in world banking history.[2][3] Other notable clients include Bradley Birkenfeld, a private banker who blew the whistle on UBS AG's aiding and abetting of tax fraud by the Swiss bank's American clientele[4][5], and Linda Tripp, the former White House and U.S. Department of Defense employee who blew the whistle on President Bill Clinton's affair with Monica Lewinsky.[6][7]

Current Operations

Kohn, Kohn & Colapinto specializes in a variety of anti-corruption and whistleblower law practice areas, including tax evasion, securities and commodities fraud, qui tam, environmental crimes, animal trafficking, and white-collar crime. The firm has also worked on behalf of whistleblowers who have suffered workplace retaliation for reporting fraud internally.[8]

Working with the National Whistleblower Center, Kohn, Kohn and Colapinto is active on a range of pro bono works.[9][10] KKC has provided pro bono representation to public interest organizations and whistleblowers at congressional policy and legislative hearings.[10] The firm has submitted numerous amicus curiae briefs in landmark whistleblowing cases before the Supreme Court to establish legal precedents on whistleblower protection laws.[11][12][13]

KKC has also served the public interest by filing various reports and petitions to contribute to the Securities and Exchange Commission and Internal Revenue Service whistleblower rulemaking.[14][15] They have worked toward strengthening whistleblower reward provisions in major environmental and wildlife protection laws by advocating the effectiveness of incentivizing whistleblowers worldwide in preventing environmental crimes.[16]

Federal Bureau of Investigation cases

The law firm founded by the Kohn brothers in 1988 first focused on defending nuclear power industry whistleblowers, who were retaliated against by their employers for revealing nuclear safety problems. This led to other areas of whistleblowing litigation, most prominently in the firm's defense of federal employees. KKC defended African American FBI agents charging racial discrimination within the bureau. The firm also defended Dr. Frederic Whitehurst, a forensics expert who blew the whistle on the lax standards at the Federal Bureau of Investigation (FBI) Laboratory and subsequently suffered retaliation by the agency. Involvement in the FBI Lab case involved KKC in the O.J. Simpson murder case, as the forensic standards used by the prosecutors, and the forensic work itself such as DNA analysis, was called into question by Whitehurst's revelations against the FBI Lab, which had become the national authority in the field of forensic investigations.

Linda Tripp Privacy Act case

Kohn, Kohn & Colapinto gained nationwide attention representing whistleblower Linda Tripp regarding her revelations of Monica Lewinsky's involvement in the sex scandal that brought about the impeachment of President Bill Clinton. The revelations that Lewinsky and Clinton had lied in their legal filings in the sexual harassment case brought against the sitting president by Paula Jones, and that Lewinsky had tried to suborn perjury from Tripp, who knew about her affair with Clinton, was one of the main factors influencing the articles of impeachment voted by the House of Representatives.

Kohn, Kohn & Colapinto handled Tripp's lawsuit against the Justice Department and the Department of Defense under the Privacy Act of 1974. Tripp had sued the government for violating her rights under the Privacy Act alleging that the Clinton Administration leaked confidential details of her employment record to the press. The government eventually settled with Tripp, including agreeing to a one-time payment of more than $595,000, a retroactive promotion, and retroactive pay at the highest salary for 1998, 1999 and 2000. She also received a pension and was cleared to work for the federal government again. Her rights to remain part of a class action lawsuit against the government were also preserved.

Qui tam actions

The firm also handles suits filed under the qui tam provisions of the False Claims Act.[17] These provisions allow persons and entities with knowledge of fraud committed against the federal government to sue the perpetrator on behalf of the United States, either with the government joining the action or, if the government declines, as a private plaintiff on their own. Qui tam has its roots in the Abraham Lincoln administration, as Lincoln was concerned with fraud by government contractors during the Civil War.

Murphy tax case

One of the firm's clients was defeated after a preliminary victory in the tax refund case of Murphy v. IRS,[18] in which the Court of Appeals for the District of Columbia originally held 26 U.S.C. § 104(a)(2) unconstitutional to the extent the statute purports to tax emotional distress awards unrelated to lost wages. On December 22, 2006, the Court vacated its own judgment in that case.

According to the Web site Tax Analysts, Murphy v. IRS "is not only one of the most significant tax decisions in decades, but it is also one of the most important constitutional cases in decades as well". The now-voided ruling had shaken up the tax community as it is rare for a federal court to hold that a tax law is unconstitutional.

The case was argued for the appellants by Colapinto, who was assisted on the briefs by S. Kohn.

On July 3, 2007, the Court ruled against Ms. Murphy. The court held (1) that the taxpayer's compensation was received on account of a non-physical injury or sickness; (2) that gross income under section 61 of the Internal Revenue Code[19] does include compensatory damages for non-physical injuries, even if the award is not an "accession to wealth," (3) that the income tax imposed on an award for non-physical injuries is an indirect tax, regardless of whether the recovery is restoration of "human capital," and therefore the tax does not violate the constitutional requirement of Article I, section 9, that capitations or other direct taxes must be laid among the states only in proportion to the population; (4) that the income tax imposed on an award for non-physical injuries does not violate the constitutional requirement of Article I, section 8, that all duties, imposts, and excises be uniform throughout the United States; (5) that under the doctrine of sovereign immunity, the Internal Revenue Service may not be sued in its own name.[20] The Court stated: "[a]lthough the 'Congress cannot make a thing income which is not so in fact,' [ . . . ] it can label a thing income and tax it, so long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Article I, Sections 8 and 9." [21] The court ruled that the personal injury award Ms. Murphy received was "within the reach of the congressional power to tax under Article I, Section 8 of the Constitution"—even if the award was "not income within the meaning of the Sixteenth Amendment".[22] Ms. Murphy's tax refund claim was denied.

An appeal subsequently filed for a rehearing en banc was denied on September 14, 2007. The decision was upheld when the U.S. Supreme Court denied review on April 21, 2008.[23]

Bristol-Myers-Squibb Qui Tam Case

Kohn Kohn & Colapinto is one of seven law firms that successfully brought qui tam actions against Bristol-Myers Squibb Company (BMS) and its subsidiary, Apothecon, Inc., for Medicare and Medicaid fraud linked to its drug pricing and marketing practices. According to U.S. Attorney Michael J. Sullivan of Boston, BSM negotiated a settlement with the U.S. Department of Justice and the attorneys general of several states, agreeing to reimburse state and federal governments a total of $499 million, plus over $16 million in interest.[24] The drug company, which fully cooperated with the government, admitted that it paid illegal remuneration to doctors and health care providers to influence them to purchase BMS' pharmaceuticals and prescribe certain BMS drugs for "off-label" usage. BMS and its Apothecon caused the submission of fraudulent claims against Medicare and Medicaid.

KKC and the other six law firms will share approximately $50 million as their share of the federal government's settlement amount, and an additional share of the state settlement amount, which totals approximately $328 million. The firms also will share in the state settlements.[25]

Bradley Birkenfeld

Bradley Birkenfeld is an American banker and whistleblower whose disclosures to the U.S. Department of Justice (DOJ), the U.S. Internal Revenue Service (IRS), the U.S. Securities and Exchange Commission and the U.S. Senate Committee on Homeland Security and Governmental Affairs led to a massive fraud investigation against the Swiss bank UBS, his former employer.[26][27][28] In February 2009, as a result of the information he gave U.S. authorities, the DOJ announced it had reached a deferred prosecution agreement (DPA) with UBS that resulted in a $780 million fine and the release of previously privileged information on American tax evaders.[29][30]

In 2008, Birkenfeld pleaded guilty to conspiracy to defraud the United States by abetting tax evasion by one of his clients and was sentenced in 2009 to 40 months in prison.[31] Many advocacy groups from around the world criticized Birkenfeld's prosecution and sentence on the grounds that it would discourage financial industry whistleblowers.[32] Birkenfeld subsequently fired his lawyers, Schertler and Onorato, and hired Kohn Kohn & Colapinto to represent him and his whistleblowing claims.

On 11 September 2012, the IRS Whistleblower Office awarded Birkenfeld $104 million as a whistleblower.[33][34] Birkenfeld received the award under the IRS whistleblower program, which gives informants a percentage of money the U.S. government recovers after fraud is found.[35] The award was the largest whistleblower payout in history, to either an individual or a group.[36][37] It surpassed the $96 million awarded to GlaxoSmithKline whistleblower Cheryl D. Eckard in 2010.[38]

The IRS explained its decision by citing Birkenfeld's "exceptional cooperation" and the "breadth and depth" of the information he provided, all of which led to "unprecedented actions" against UBS. IRS amnesty programs have since collected $5 billion from people who participated in UBS's illegal scheme based on the information provided by Birkenfeld.[39]

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See also

Notes
  1. "Kohn, Kohn & Colapinto Whistleblower Law Firm". www.natlawreview.com. Retrieved 2020-08-04.
  2. "Danske money laundering scandal is 'tip of iceberg', whistleblower's lawyer says". Reuters. 2018-11-13. Retrieved 2020-08-04.
  3. "The smoke detector". www.fraud-magazine.com. Retrieved 2020-08-04.
  4. Farhi, Paul (2012-09-11). "Stephen Kohn wins another whistleblower case, this one for Bradley Birkenfeld". Washington Post. ISSN 0190-8286. Retrieved 2020-08-04.
  5. Journal, A. B. A. "Law Firm Seeks 12.5 Percent Share of Ex-Banker Birkenfeld's $104M IRS Whistleblower Award". ABA Journal. Retrieved 2020-08-04.
  6. "Defense Dept. Settles With Linda Tripp". AP NEWS. Retrieved 2020-08-04.
  7. "Washingtonpost.com Special Report: Clinton Accused". www.washingtonpost.com. Retrieved 2020-08-04.
  8. "Kohn, Kohn & Colapinto Whistleblower Law Firm". www.natlawreview.com. Retrieved 2020-08-04.
  9. "SEC Enforcement Report Praises Whistleblowers". mondovisione.com. Retrieved 2020-08-04.
  10. "Investigations Newsletter: DOJ Urged to Create Coronavirus False Claims Task Force". JD Supra. Retrieved 2020-08-04.
  11. "Oversight Subcommittee to Examine Whistleblower Qualifications and Protections". House Committee on Oversight and Reform. 2020-01-27. Retrieved 2020-08-04.
  12. "Congress Considers Proposed Protections for Intelligence Community Whistleblowers". The National Law Review. Retrieved 2020-08-04.
  13. "Defending Whistleblowers | Arts & Sciences". www.bu.edu. Retrieved 2020-08-04.
  14. "Stephen Kohn on the Corporate Drive to Cripple the SEC's Whistleblower Program". Corporate Crime Reporter. 2019-12-02. Retrieved 2020-08-04.
  15. "$83 Million Largest-Ever Whistleblower Award Praised by Top Lawyers". Lawyer Monthly | Legal News Magazine. Retrieved 2020-08-04.
  16. Journal, A. B. A. "Whistleblowing for Wildlife: Advocates hope rewards prompt poaching reports". ABA Journal. Retrieved 2020-08-04.
  17. 31 U.S.C. § 3729 through 31 U.S.C. § 3733.
  18. 460 F.3d 79, 2006-2 U.S. Tax Cas. (CCH) paragr. 50,476, 2006 WL 2411372 (D.C. Cir. Aug. 22, 2006).
  19. 26 U.S.C. § 61.
  20. Opinion on rehearing, July 3, 2007, Murphy v. Internal Revenue Service and United States, case no. 05-5139, United States Court of Appeals for the District of Columbia Circuit, 493 F.3d 170, 2007-2 U.S. Tax Cas. (CCH) paragr. 50,531 (D.C. Cir. 2007); see case.
  21. Opinion on rehearing, July 3, 2007, p. 16, Murphy v. Internal Revenue Service and United States, case no. 05-5139, United States Court of Appeals for the District of Columbia Circuit, 493 F.3d 170, 2007-2 U.S. Tax Cas. (CCH) paragr. 50,531 (D.C. Cir. 2007).
  22. Opinion on rehearing, July 3, 2007, p. 5-6, Murphy v. Internal Revenue Service and United States, case no. 05-5139, United States Court of Appeals for the District of Columbia Circuit, 493 F.3d 170, 2007-2 U.S. Tax Cas. (CCH) paragr. 50,531 (D.C. Cir. 2007).
  23. Order List, Monday, April 21, 2008, Certiorari Denied, Murphy, Marrita v. IRS, et al. no 07-802 .
  24. http://www.pacificnewscenter.com/default.asp?sourceid=&smenu=73&twindow=&mad=No&sdetail=13382&wpage=&skeyword=&sidate=&ccat=&ccatm=&restate=&restatus=&reoption=&retype=&repmin=&repmax=&rebed=&rebath=&subname=&pform=&sc=1718&hn=pacificnewscenter&he=.com
  25. http://www.usdoj.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Sept2007/BMS-PR-Final.html
  26. Browning, Lynnley (10 November 2008). "Indictments Said to Be Possible in UBS Inquiry". New York Times. Retrieved 16 September 2013.
  27. Hilzenrath, David S. (10 November 2008). "U.S. Given A Look at Swiss Bank Accounts". Washington Post. Retrieved 16 September 2013.
  28. "UBS to Pay a Total of $0.98B to Settle SEC and DOJ Charges". LawUpdates.com. Archived from the original on 8 November 2016. Retrieved 16 September 2013.
  29. Baxter, Brian. "UBS to Pay $780 Million Fine in Tax Case Settlement". American Lawyer. Retrieved 16 September 2013.
  30. "UBS Enters into Deferred Prosecution Agreement: Bank Admits to Helping U.S. Taxpayers Hide Accounts from IRS; Agrees to Identify Customers & Pay $780 Million". U.S. Department of Justice. Retrieved 16 September 2013.
  31. Coder, Jeremiah (September 2012). "IRS PAYS BIRKENFELD $ 104 MILLION WHISTLEBLOWER AWARD. (Section 7623 -- Expenses of Detecting Frauds)". Tax Notes Today. 2012 TNT 177-1 (177).
  32. Brown, Tom (9 October 2009). "Prosecution of UBS informant seen backfiring on U.S." Washington Post. Retrieved 16 September 2013.
  33. Temple-West, Patrick & Lynnley Browning. "Whistleblower in UBS tax case gets record $104 million". Reuters. Retrieved 3 September 2013.
  34. "U.S. IRS awards $104 million to UBS tax case whistleblower". Reuters. September 11, 2012. Retrieved September 11, 2012.
  35. Ramonas, Andrew (September 11, 2012). "Swiss Bank Whistleblower Wins $104M Reward from IRS". The Blog of the Legal Times. Retrieved 1 February 2013.
  36. Farnham, Alan. "7 Richest Snitches: Time to Rat Out Your Boss?". ABC News. Retrieved 3 September 2013.
  37. Triedman, Julie (November 28, 2012). "Long Delay for $104M IRS Whistleblower Payment". The American Lawyer. Retrieved 1 February 2013.
  38. Wearden, Graeme (27 October 2010). "GlaxoSmithKline whistleblower awarded $96m payout". Guardian UK. Retrieved 17 December 2013.
  39. ElBoghdady, Dina (September 11, 2012). "UBS whistleblower gets $104M from IRS for helping in Swiss bank probe". The Washington Post. Retrieved 1 February 2013.
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