The term “whistleblower” applies to any individual exposing wrongdoing, but the most successful cases — the ones you may have heard about — are those that individuals working with whistleblower lawyers file under the qui tam provisions of the False Claims Act. The act has special provisions that make it possible for whistleblowers to sue and collect a share of any proceeds collected by the government. Both the idea of rewarding the whistleblower and the idea that a whistleblower could hire a whistleblower lawyer and sue on behalf of the Government are crucial to this law and are special rights we should not take for granted. They make it worthwhile for individuals with special knowledge to report fraudulent activities.
Of course, learning how the law works is crucial for anyone hoping to do the right thing. The easiest way to learn how the law works is to contact an experienced attorney with information you may have about your case. Most whistleblower lawyers work on a contingency fee basis, so such an initial contact is not likely to be costly.
What is a Whistleblower?
The term “whistleblower” can apply to any individual who exposes wrongdoing. There are environmental whistleblowers, financial whistleblowers, medical and defense contracting whistleblowers. If there is an industry or profession in which fraud or wrongdoing is practiced, chances are there is a whistleblower who is trying to help reform it.
As a result of the heroic efforts of many whistleblowers, the value of the information whistleblowers provide, and the important role they play in improving society, the work of whistleblowers is finally starting to gain recognition. The most financially successful whistleblowers, the ones you may have heard about most often, are those who filed qui tam cases under the federal False Claims Act. (See 31 U.S.C. §§3729-3733 a pdf copy.)
This law is designed to make it worthwhile for individuals to report fraud committed against the United States. Learning how this law works is crucial for anyone who wants to expose fraud against the government. If the whistleblower files a case under this law and the government is able to obtain a recovery, that whistleblower can earn between 15 percent and 30 percent of the recovery. As a result, many cases have been won or settled for millions of dollars, and many fraudulent and dangerous schemes have been exposed.
The role of a whistleblower lawyer is to work with the client and figure out both which laws are applicable, and to help present the strongest case possible. When suing under the Federal False Claims Act, a whistleblower lawyer may be necessary simply because many jurisdictions require an Attorney when an individual sues on behalf of the government. In addition, of course, these are complicated cases. A whistleblower lawyer can help determine which claims make the most sense and which claims are worth pursuing under the law. The more the attorney can help the client present a stronger case, the better. The idea is to help present something to the attorneys in the government and help them see how the case can be successful.
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These financial incentives exist precisely because of what we all know to be true. To fight wrongdoing, government officials desperately need the information only a whistleblower can provide. Indeed, study after study confirms that government regulators and investigators need help from of people with inside information to bring about reforms or prosecute major cases. It is simply not possible for Whistleblowers and whistleblower attorneys to pursue such cases without the potential rewards provided by these laws. That is why it is also possible to collect statutory attorneys’ fees under the False Claims Act.
The point of the Federal False Claims Act, as well as the many State False Claims Acts, is to provide an incentive structure to support the brave individuals who want to report fraud. There are many other whistleblower laws, including several that also encourage the whistleblower to come forward and earn a potential reward. There is an IRS whistleblower law to report major tax fraud, as well as two new laws that encourage reports of financial fraud through the Securities and Exchange Commission and the Commodity Futures Trading Commission. Individuals who wish to remain anonymous while reporting securities fraud can hire an attorney and, through their lawyer, report fraud under the SEC whistleblower law.
A whistleblower who files a successful case under the Federal False Claims Act can receive as much as 30 percent of the amount recovered by the government in civil damages and civil penalties. Since government contracting is invariably big business, the awards can be large as well.
Many whistleblowers, even many who have earned rewards, did not know these incentives existed until they found an attorney. Sometimes whistleblowers come forward to stop the wrongdoing first, and only learn about their rights afterward. Hopefully, one result of increasing publicity for whistleblowers is that people who want to report wrongdoing will know to contact a whistleblower lawyer and get help they need before they take the difficult step of reporting fraud and wrongdoing.
Fear is the enemy of every whistleblower. That fear is, unfortunately, not unfounded. Those who would defraud the government may also try to retaliate against honest individuals. While all threats against whistleblowers cannot be eliminated the law does provide certain protections.
For example, it may be possible to sue for double the back pay a whistleblower is owed, plus re-instatement damages and special damages if the whistleblower suffers retaliation as a result of fighting fraud against the government.
However, being a whistleblower, especially when reporting a major fraud scheme, is complicated. The laws are complex and the procedures usually require the help of a whistleblower lawyer who is knowledgeable about this specific area of the law.
Whistleblower Laws and the FCA
Legislation creating the False Claims Act (FCA) passed Congress and was signed into law in 1863 under the Lincoln Administration. The law came about to fight rampant fraud being committed against the Union Army during the Civil War. While the law has undergone many amendments throughout history, the idea behind it remains the same today. The law is designed to encourage whistleblowers and through that encouragement help the government recover money from those who commit fraud.
The so-called qui tam provisions of the Federal False Claims Act give an individual a private right of action in court. A person can file a case on behalf of themselves and the government against the defendants. This special right enhances an individual’s ability to blow the whistle. Under this law, whistleblowers can fight the defendant—they are not limited to sounding an alarm. They can work with a whistleblower attorney and hopefully engage the Department of Justice in pursuing the case.
The False Claims Act’s unique procedure can help as well. Cases are filed “under seal,” or in secret, to allow the government to investigate the claims and decide whether or not to join the case. At least initially, only the government and the whistleblower lawyer will know the identity of the person who filed the suit. Eventually, that information will likely come to light, but the time period of the case being under seal may provide an opportunity for someone to build a new life away from a company that wants to defraud the government.
Reporting fraud is a serious endeavor and serious whistleblowers can be rewarded under the law for their work and the information they have provided. If you are considering filing a whistleblower action, you should strongly consider contacting a whistleblower lawyer before taking any action to ensure that your rights and reputation are protected.