False Claims Act Whistleblowers Are Critical to Exposing Fraud in Government Grant Programs

December 22nd, 2022

Individuals Who Expose Fraud Can Be Handsomely Rewarded for Doing So 

If you remember the preamble to the U.S. Constitution, you’ll recall that one of the reasons the document was “ordained and established” was to “promote the general Welfare.” One way the federal government does so is by funding billions of dollars in grant programs. It also provides financial support and resources directly to individuals, businesses and communities. Such efforts became more prominent during the pandemic, as the government funneled large sums into programs, such as the Paycheck Protection Program (PPP). These funds were a lifeline for countless recipients. The government has also recently announced many large grant programs designed to achieve particular goals. These include, for example, programs to promote use of biofuels, to strengthen food supply chains, and to create career opportunities for next generation leaders, Unfortunately, these government actions are also a magnet for scam artists who wrongfully diverted these funds for their own selfish ends. Persons who uncover this kind of grant funding fraud may be eligible for a monetary reward from the Government.

The Government Can’t Uncover All Cases of Fraud

Investigations and prosecutions by the Government often catch up with these bad actors whose conduct can be challenged in criminal and civil actions. For example, federal authorities in Minnesota recently charged 48 people in what they allege was the country’s largest COVID-19 funding scam. The defendants allegedly stole at least $250 million in federal funds that were supposed to help feed needy children. Similarly, the federal government recently indicted three Chicago-area residents on charges they fraudulently obtained more than $2.75 million in PPP loans. 

But authorities believe such cases only scratch the surface of fraud involving pandemic-related grant programs. Of course, scams involving the wrongful diversion of federal funds didn’t start with COVID-19. Unscrupulous individuals have been scamming the government – and taxpayers – out of money since the founding of the republic. 

Because of the persistence and scope of financial fraud against the government, the Government’s enforcement mechanisms, while effective, lack the resources to expose and pursue all incidents of wrongdoing. This is why the federal government relies, in part, on private individuals to put them on notice of any fraudulent activity. This is also why the law provides financial rewards and protections against retaliation for brave “whistleblowers.” These individuals put their careers and reputations at risk to reveal scams that involve federal grants, funding and other programs. 

The False Claims Act Rewards and Protects Whistleblowers Who Report Government Funding Fraud

The False Claims Act (FCA) is the oldest and most frequently used federal whistleblower program. The law has its origins in the Civil War and the rampant war profiteering that resulted in the federal government being defrauded out of millions of dollars. The FCA was an effort to stop these scams by allowing private individuals to sue on behalf of the federal government. In existence to this day, the FCA rewards individuals for their honesty and efforts, by awarding them 15% to 30% of any money the government recovers as a result of the information they provide.

The FCA also has an anti-retaliation provision that allows persons to sue an employer or contractor that retaliates against them for reporting or trying to stop this fraudulent conduct.

If you’re aware of illegal conduct that involves federal grant money or financial benefits and are ready to share what you know, the whistleblower attorneys at Halunen Law stand ready to support you. We’ve recovered millions of dollars in compensation for individuals who had the courage to do the right thing. During a free, confidential consultation, our whistleblower lawyers can answer your questions and help determine if you have grounds to pursue a claim. Contact our firm at 612-605-4098 or submit this Contact Form online.