Financial Rewards For Whistleblowers

False Claims Act cases are not the only kind you can file to get a reward as a whistleblower. In addition to the Federal False Claims Act, there are 29 or 30 state False Claims Acts with various levels of claims that one can bring.

There are also two relatively new whistleblower laws that were enacted as a result of the Dodd-Frank legislation: one with the Securities and Exchange Commission, the other with the Commodity’s Future Trading Commission. These laws don’t work exactly like the Federal False Claims Act, but they do provide financial rewards for whistleblowers if those agencies take the information from the whistleblower and obtain some kind of act, judgment, or action as a result. If all this takes place, then the whistleblower gets a reward, and that’s a good thing.

On top of these is the IRS whistleblower law to report major tax fraud to the IRS. The IRS also provides rewards when they take action as a result of the whistleblower’s report, and that action leads to them collecting money.

Importance of Whistleblower Rewards

It’s important for the government to recognize the contribution of whistleblowers in a concrete way, and it’s important that everybody understands that blowing the whistle is a difficult and heroic act. Therefore, rewarding the whistleblower is appropriate. It not only rewards that individual whistleblower, but changes the way people think about whistleblowers to understand that they are deserving of some kind of financial reward.

Not only does the whistleblower reward incentivize whistleblowing, but also the rewards, provide a way for an individual to pursue a major claim against a big case of fraud against a company with professional assistance. To do that, one needs legal help from a whistleblower lawyer, and absent the possibility of a reward, there is likely no way for an individual to be able to work with an attorney and pursue these cases.

So, the whistleblower reward helps make the whole process of exposing fraud possible. The False Claims Act and in particular the qui tam provisions providing a reward, has led to more collections by the government for fraud than any other law.  Now the incentive provisions in the SEC, CFTC and IRS whistleblower programs are providing similar incentives to help combat fraud in these areas as well.

Is the False Claims Act The Only Kind of Case You Can File to Get a Reward As a Whistleblower?

No, it’s not. In addition to the Federal False Claims Act, there are now some 30 state False Claims Act with various levels of kinds of claims that one can bring.

There are also two relatively new whistleblower laws that were enacted as a result of the Dodd-Frank legislation; one with the Securities and Exchange Commission (SEC), the other with the Commodity Futures Trading Commission. These two whistleblower laws don’t work exactly like the Federal False Claims Act, but they do provide rewards if those agencies take the information from the whistleblower and obtain some kind of judgment or action, as a result. The whistleblower gets a reward and that’s a good thing.

Then there’s the IRS whistleblower law to report major tax fraud to the IRS. The IRS provides rewards when they take an action as a result of the whistleblower’s report leads to them collecting money.

Financial Obligations for Defendants

Defendants in a whistleblower case don’t have to pay until they settle or lose a judgement. While, generally speaking, the government’s decision to intervene in a case indicates a high degree of a chance of success, defendants have the right to defend themselves in court. And if they prevail in court, of course, they don’t have to pay.

If they do not prevail, or if they settle, then they would have to pay. But the government’s decision to intervene in a case doesn’t mean that the defense doesn’t have rights to defend themselves against the allegations.