Marlan Wilbanks and the False Claims Act Filter

Last month, Elin Baklid-Kunz was named as the Taxpayers Against Fraud (TAF) whistleblower of the year.

And her lawyer, Marlan Wilbanks, was named as the TAF lawyer of the year.

Baklid-Kunz blew the whistle on false claims made by Halifax Hospital Medical Center and Halifax Staffing Inc.


Earlier this year, Halifax paid $85 million to settle the allegations.

Wilbanks represented Baklid-Kunz in the false claims action.

Wilbanks and the law firms for which he has been a partner have helped recover over a billion dollars back to the American taxpayers in cases against large corporations.

Of the 60 or so whistleblowers who call his firm every year seeking representation, he takes maybe three of them. That’s one out of twenty.

“These cases are so difficult,” Wilbanks told Corporate Crime Reporter in an interview last week. “If you don’t pick them right, if you are not a good handicapper, you are going to go broke. They have to have compelling facts that have to have lying, stealing and cheating against the government, facts that an eighth grader could understand. And the dollars have to be very significant. And you need a defendant that is solvent.”

In your fifteen years of doing this, how many cases have you brought?

“Probably about 30 cases,” Wilbanks says.

Of those, how many has the government joined?

“Probably sixty percent.”

Of the 30, how many have been winners for you?

“Probably about 90 percent,” Wilbanks says. “I’ve had some where there was a result where we voluntarily dismissed it, cases where we did not get a governmental intervention and something significant happened — such as the defendant’s insolvency. And it simply did not make it worth the effort to go forward. I can think of very few where we haven’t had a recovery.”

“You want a case to have enough significant merit that even if the government doesn’t intervene, it poses a litigation risk or some other type of adverse publicity impact on the corporation.”

How many cases are you working on now?

“I have about twelve that are in the hopper,” Wilbanks says. “Only about half of them are out from under seal. The others are in the process of being filed or being jointly prosecuted with the government. Of those six that are still under seal, the defendants only know about one or two of them. They have reached the stage where the government will partially allow a lifting of the seal so that they can share the complaint with the defendant.”

At the Taxpayers Against Fraud Awards dinner, the whistleblower of the year award went to Elin Baklid Kunz — one of your clients. She said that when she called your firm, you answered the phone at the firm. Is that usual for you?

“We have a very small firm,” Wilbanks said. “I have two other partners and a legal assistant. Our model is unique. It’s three partners and a legal assistant who answers the phone. But if you call in and hit my extension, you get it. But I always answer my phone. And I have a cell phone with me 24 hours a day. And all of my clients have my cell phone number.”

She was calling the firm number. And she said that had you not answered, she might not have filed this lawsuit.

“Yes,” Wilbanks said. “I heard the phone ringing and my assistant wasn’t in and I just picked up the phone. That began a three or four month phone journey with Elin. We talked probably five or six hours a week, just talking about her scenario. Initially, she just wanted information. She wanted to find out where the Halifax situation was within the norm. She was a tremendously reluctant relator. She was someone who just couldn’t believe the things she was seeing. She was starting to feel like she must be missing something. The things that were going on at Halifax were so contrary to the law. The people there knew better. They were intelligent people. They were informed people.”

But they didn’t have the appetite to follow the law when it required them to return money to the government or to stop improperly billing the government.”

“It was a journey of listening on my part and being available to discuss various scenarios. She discussed maybe a dozen things that were illegal or improper there. And then she got to the point where she decided, regardless of it being potentially a career killer for Elin and her family, she had no choice. It became abundantly clear that if she didn’t go and become a cooperating federal witness, none of the practices were ever going to change.”

Did you sense from the first phone conversation that she was the real deal?

“It took me a while. I have a pretty good sense for people. And a pretty good sense when I’m being gamed or if the individual is looking for quick money. With Elin, money was never a part of it. She was all about the ethics of it and taking her own professional oath and credentialing very seriously. It probably was at the end of the second or third week of talking that she actually started telling me specific statistics about internal audits that showed huge problems with medical necessity. And it wasn’t just talk. She was saying — I’m looking at this document. This document is within the scope of my work. It’s a document that I’m sharing with my superiors. That’s when I knew it was the real deal.”

“No matter how compelling someone is over the phone, ultimately it comes down to the evidentiary trail. Once we started our journey and the documents began to amass, then it became clear that it was a very egregious situation. Not only was Elin not overselling it. She was underselling how bad it was.”

You spoke with her for hours and hours before you met her. Is that a practice of yours — to not to meet with someone unless you are sure you are going to take it?

“The first part of the getting to know each other stage is making sure that I’m not wasting my time and they are not wasting their time. Typically, I like to talk to them on the phone, give them a confidentiality agreement, not that I’ll take their case, but anything they will share with me will be covered by the privilege. I will then actually look at a couple of documents that I will have them send to me. And then at that point, if they are looking like they are going to be the one out of twenty, then we set up a face to face meeting. I will very rarely — maybe only a couple of times out of the thirty or more cases that I’ve had — sign a retainer agreement where we didn’t have a lot of face time together.”

“I will sign an investigative agreement, but never actually sign them up as a client until I’ve looked at them and looked at the documents and made sure that I still have the high level of comfort. It’s been my experience through the years, even if the facts look compelling, the U.S. Attorneys want to make sure that the relator is rock solid. There are a lot of ways to lose these cases. If they have a weak, shaky relator, that’s not going to help get an intervention.”

“I want to look at them critically and ask — what is the U.S. Attorney going to think about this relator? Is the U.S. Attorney going to find the relator credible? Are they going to believe that the relator is parasitic or opportunistic? I have to look at the client through that filter before I decide to sign them up. I have a novel approach to these cases. I don’t take the case unless it’s the best thing for the client, not just for the law firm. I have turned away some very good cases that I knew that we could recover, but the relator was so young in his or her career, and had such a bright career — it would be a career killer. It would have been good for me but not good for the relator.”

But even for a young relator, if they are able to recover significant millions of dollars, it might be a career killer, but then they could do what they want.

“Nobody has that clear of a crystal ball,” Wilbanks said. “When you understand the math of the business, you understand the case has to be huge. The typical relator in the United States right now is going to recover somewhere around 17 percent. Let’s say it’s a $10 million recovery. The relator gets 17 percent. That’s $1.7 million. Then the relator’s attorney is going to get 40 percent or so of that. That takes it down to somewhere around $1 million. And then they pay taxes on it. So, they might get less than $500,000.”

“So if it’s a $20 million case, they may take home $1 million. You can see that the case has to be huge. The taxpayers are going to get on average 83 percent. And the relators have to pay their attorneys and full taxation.”

Do you have a dollar cut off on cases you won’t take?

“At this stage, if it’s not bare minimum $10 million, it’s highly unlikely I would take it, unless it involves public safety concerns, patient safety concerns,” Wilbanks said. “And there I might make an exception. Many times I will get a case where there are unnecessary procedures or cases where there is patient harm involved. In those cases, you have to weigh patient harm with dollars. My clients have that same prism. They will come and say — look. I don’t care. It doesn’t matter if I’m going to make millions. This has to stop. My conscience won’t allow me to not report it.”

“But the low end of the average of my cases is in the $75 million to $100 million range.”

[For the complete q/a transcript of the interview with Marlan Wilbanks, 28 Corporate Crime Reporter 38(11), October 6, 2014, print edition only.]


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