Protections and Compensations for Whistleblowers
Have you noticed the progression in the news of fraud cases against the government? Stories of multi-million dollar rip-offs of your tax dollars pop up on a regular basis. In fact, the smaller cases—less than a million dollars—don’t even appear to be newsworthy any more. And yet, they are out there.
It turns out that the government doesn’t have enough people to police the fraud. So, as an alternative, our government relies more and more upon average citizens to uncover those whose livelihoods depend on stealing from all of us by submitting false claims. But, sometimes, our often-unsung heroes feel encouraged to come forward, revealing what they know about fraud and receiving financial rewards.
The legal encouragement comes courtesy of the False Claims Act (FCA), 31 U.S.C. § 3729, the earliest version of which was established by President Lincoln to combat fraud. You may know it as the Whistleblower Act, and it endows everyday citizens with the power to bring qui tam cases against those who would defraud the government.
What Are Qui Tam Whistleblower Cases?
“Qui tam” is an abbreviation of a Latin phrase that roughly translates, “a person who sues for the king as well as for himself.” Qui tam whistleblower suits can be initiated by the average person who, for example, has solid knowledge of:
- Defrauding federal health care programs such as Medicare, Medicaid, and TRICARE.
- Defrauding federally-insured mortgage programs.
- Defrauding any federal contract, including national defense projects and the military, public works projects, the federal food stamp program, NASA, and environmental projects.
- Defrauding federally-insured student loans and grants.
- Defrauding the Securities and Exchange Commission (SEC).
- Defrauding the Internal Revenue Service (IRS), although such fraud is not prosecuted under the FCA but under IRS statutes modeled on the FCA. Certain limitations apply.
Whistleblowers are formally called “relators” and can face personal risk when bringing a case. Because of this, the FCA includes provisions that grant relators rewards when the government recovers money as a result of information provided by a whistleblower.
Note that various forms of harassment and retaliation against the relator are forbidden under the FCA.
What Rewards Are Possible for a Successful Whistleblower?
The FCA’s provisions include a lot of latitude for deciding what percentage of a recovery a relator will receive. Much depends on the amount and the quality of the evidence that is brought forward. Under the regulations, a successful whistleblower can collect from 15 to 30 percent of any recovery. Recoveries are often large, because the FCA provides for the recovery of triple damages and penalties of $10,781 to $21,563 per claim. Some suits can have hundreds of individual claims (one claim is considered to be a separate fraudulent request for government payment). Under the FCA, a whistleblower can also recover legal fees and costs from the perpetrator of the fraud.
Many billions of dollars are recovered in qui tam claims. In 2015 alone, $2.9 billion was recovered because of the efforts of whistleblowers. Relators received a record $597 million.
Understanding the Mind of a Whistleblower
What motivates a person to do the right thing in the face of opposition? How do people know which path to take when faced with a conflict of interest? These questions are the subject of philosophical debates, timeless works of fiction and endless scientific research.
We often ask ourselves how we might respond to an ethical conundrum. If you’ve ever taken an ethics course, then you’ve probably mulled over hypothetical situations like would you report a family member for committing a crime? or would you hire a friend over a more qualified employee if you oversaw hiring for your business?
Who Can Initiate a Qui Tam Claim?
Generally, the vast majority of qui tam cases arise from those who are current or former employees of the companies or organizations who committed the frauds. However, suits can be brought by anyone who has substantive information, including subcontractors, business competitors, customers, patients, other federal employees, and others. It is not required that you personally have endured any personal harm or defrauding in order to bring a case.
The person who reports the fraud first, known as the first relator, is usually the only person who can recover an award under the FCA. For this reason, we at the Louthian Law Firm recommend that you speak with legal counsel and bring your case promptly so that you are not locked out.
The FCA does not allow claims where the whistleblower reports fraudulent activity that is already publicly known.
What Types of Claims Can Be Brought in a Qui Tam Whistleblower Action?
- Intentionally submits a fraudulent or otherwise false payment claim to the government.
- Intentionally lies (makes a false statement) or creates a false record in order to have a false claim paid.
- Schemes with others (conspires) to present a false claim or to make a false statement in order to obtain payment.
- Deliberately using a false statement in order to deprive the government of any money or property it is due.
Some exceptions exist. For example, FCA claims cannot be brought against individual states, members of Congress, some members of the federal government’s executive branch, and judges. Additionally, a qui tam case can only be brought in instances of fraud, and not for reasons of waste or sheer incompetence.
I’m Ready. How Can I Bring a Case under the False Claims Act?
If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.
For a free, confidential evaluation of your case, call the Louthian Law Firm today at 803-454-1200 or, if you prefer, you can fill out our online contact form.