Government Considerations in Whistleblower Cases

In all cases, including other whistleblower reward filings like those with the SEC whistleblower Office and the CFTC whistleblower office in the IRS, government officials just like attorneys will take certain considerations in determining a whistleblower case, and they will go over to the merits of the case, first and foremost, and whether or not they can establish something.

With the False Claims Act case, governments are going to look to determine what generated the false claim, what made the government pay for either a service or a good that was a false statement or a false representation then see if they agree that it is really actionable under the False Claims Act. In the other kinds of actions, for example, the SEC, will not want to see violations of security and law. Government lawyers look at the merits of the case. Then they try and determine what violations occurred that can be prosecuted.

The government may look for cases where the investigation is already almost complete, but they are also willing to investigate. They would ideally like everything to be easy but it rarely is. If the allegations are substantial enough and credible enough, they are going to investigate and have the capacity to investigate.  The government is serious about investigating these allegations and has professionals who will do that.

Case Law

The government looks at case law. The body of case law to review now is larger than it once was and people are more aware of it. There are a lot of case law issues that affect whether a case may be good. The first look at a case, the question is more visceral as to whether or not a fraud has been committed.

That is not a true legal standard, but the government lawyers want to bring a strong case. They want to see there is an emotional appeal or a direct appeal or at least a very clear violation of law in order to bring it forward. As to new legal issues, if it is a very clear violation, that the government would be willing to do that. But they are under constraints and that they are cognizant of their responsibility not to go forward with a bad case which might create bad law. The government lawyers may be a little bit more conservative in that regard than plaintiff’s lawyers.

Strength of the Evidence

In the context of a False Claims Act case, the government looks at the strength of the evidence, but they also look to the Relator to be able to tell them how to get more evidence. The government has a lot of authority to issue civil investigative demands to investigate cases under the False Claims Act. And they will use that authority if they think that there is a likelihood of obtaining more valuable evidence to bolster a case.

People want to be sure that clients and relators are obtaining evidence lawfully. But the government wants as much evidence as they can get in order to bring the strongest case possible. A lot depends on the knowledge of the Plaintiff-Relator not only as to whether or not they have evidence but how they can point the government investigators in the right direction to get more evidence.

How the Government Uses Evidence in an FCA case

Government officials will look at documentary evidence carefully. They usually want to know that the documentary evidence came to the Plaintiff-Relator in a normal manner. Recordings are problematic sometimes, as in cases the government has requested a plaintiff wears a wire on behalf of the government. That is not something attorneys advise clients to do unless the government would request it. That is a relatively extraordinary event. The government is usually clear with respect to wanting as many names of witnesses that would corroborate a plaintiff’s allegations.

The government understands that a whistleblower usually cannot possibly have all the evidence with respect to a False Claims Act Case. It is not usually possible for that but, they are hungry for any evidence and information a whistleblower has to support the case.

Which Government Agencies Can Intervene

The Department of Justice is the government agency that will intervene in a False Claims Act. The Department of Justice has its civil frauds division in what is colloquially called main justice. It also has US Attorneys’ offices throughout the country and they share jurisdiction depending on the size of the damages of the case and they will collaborate on cases. They have the authority to intervene on behalf of the government in False Claims Act cases at a federal level. At a state level, it varies state to state. In DC, it is the District of Columbia’s Attorney General that has the authority to intervene, which is standard procedure for each state.

With respect to other whistleblower laws, they are set up a little differently. Only the False Claims Act works in the sense of having a government agency intervene with an action filed in court. In the SEC, the IRS whistleblower law, and the CFTC whistleblower law, these are actions that are filed with the government agency and they decide what to do with that information. The case does not originate with an individual filing the case in court. The government already effectively control the action from the minute that someone files it as opposed to a court case where they have to act to intervene. The structure and procedure is a little different under those laws. The IRS has the authority to act on behalf of the government to investigate and prosecute claims filed with the IRS Whistleblower office to intervene in tax fraud claims.