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The Taxpayers Against Fraud Education Fund explains how the False Claims Act (FCA) works in this short video. The attorneys in Halunen Law’s False Claims Act practice group are members of this non-profit, public interest organization that is dedicated to standing against government fraud and protecting public resources.

What is a Whistleblower?

Employees who uncover illegal or deceptive activities are in a tricky position. On the one hand, they don’t want to be a part of unlawful activities. On other hand, they need their job. What is a whistleblower? Like a referee blowing a whistle to stop play and enforce rules during a game, a whistleblower is someone who raises concerns about an organization’s misdeeds or fraudulent conduct to a supervisor, manager, government agency, court, or other authority.

Wrongdoing a whistleblower may report could include corruption, abuse, fraud, or decisions that endanger employee or public safety. Whistleblowers may be insiders with specific information about their employer’s illegal conduct, or they could be outside the organization with expert analysis sufficient to show a company is engaged in illegal conduct. The primary factor is that the person shines a light on unlawful activity that might otherwise remain in the dark.

Whistleblowers are crucial in combating wrongdoing by corporations and individuals. Many schemes and crimes, such as fraud against the government, negatively impact taxpayers, public welfare, or the environment but would go unchecked without whistleblowers. Whether in business or government, whistleblowers are essential to a healthy, well-functioning republic, and they help to create effective change, expose misconduct, protect taxpayer dollars, uphold the rule of law, and require accountability.

There are many reasons to blow the whistle, but for many whistleblowers, it’s simply about doing what’s right. Because doing the right thing sometimes comes at a cost, whistleblowers deserve to be fully compensated, protected, and made whole for their courage—and they deserve experienced attorneys who will fight for them along the way.

What Whistleblower Laws Might Apply and Protect You?

The government recognizes that insiders are the best resource for identifying various types of wrongdoing. As a result, several laws have whistleblower components meant to protect conscientious employees.

False Claims Act

The FCA is one of the first and most influential whistleblower laws in the United States. Signed into law by President Abraham Lincoln in 1863, the FCA resulted from troops receiving substandard services and goods from suppliers. The original goal was to prevent contractors from committing fraud against the government.

Examples of unlawful behavior covered by the FCA include:

  • Health care fraud
  • Bid rigging
  • Billing the government for unapproved costs
  • Billing the government for services not provided
  • Charging inflated prices to the government
  • Compensating school admissions officials based on enrollment
  • Falsifying compliance with government regulations to get public money
  • Failing to comply with contract requirements
  • Giving kickbacks to health providers in exchange for referrals
  • Manipulating research results and data
  • Misusing grant money

An individual called a “relator,” who assists with fraud in connection with government programs and government contractors, may collect between 15% to 30% of financial sanctions recovered.

This powerful piece of legislation recovers money for American taxpayers as well as the United States treasury. Some of the most common types of fraud involved in these cases include:

  • Defense contractor fraud
  • Medicaid/Medicare fraud
  • Procurement fraud

Dodd-Frank Act / SEC Whistleblowers

Signed into law as a response to the 2008 financial crisis, the Dodd-Frank Act established new requirements and restrictions on hedge funds, banks, and other financial institutions. It also instituted a Financial Stability Oversight Council, Office of Financial Research, and the Consumer Financial Protection Bureau. These entities strive to help promote financial stability, prevent consumer abuse by financial service providers, and improve transparency and accountability in the U.S. monetary system.

To help combat insider trading and fight corruption, the Dodd-Frank Act contains a whistleblower provision. Individuals who aid in the prosecution of securities and commodities fraud can collect up to 30% of the monetary penalties collected.

IRS Whistleblower Reforms

The reforms under the Taxpayer First Act includes provisions for improving taxpayer service. The goal is to enforce tax laws impartially and fairly. Individuals who assist in cases connected with tax fraud can collect up to 30% of the financial penalties collected. Although there is no limit to the amount awarded, there are guidelines that determine what percentage of recovered tax funds a whistleblower will receive.

What are Qui Tam Statutes?

Oftentimes “qui tam” and “False Claims Act” are used interchangeably. While the FCA is a qui tam statute, other statutes, like the SEC and IRS whistleblower statutes, also provide rewards for whistleblowers. The goal of these civil suits is to stop endeavors that defraud the government and expose the public to harm.

  • Some other qui tam statutes (whistleblower reward statutes) include:
  • IRS whistleblower program – 26 U.S.C. § 7623
  • SEC / Securities Exchange Act– 15 U.S.C. § 78u-6
  • CFPB / Commodity Exchange Act – 7 U.S.C. § 26
  • Financial Institution Reform, Recovery, and Enforcement Act (FIRREA) 12 U.S.C. § 4201-10
  • Foreign Corrupt Practices Act (FCPA) – 15 U.S.C. § 78m, 78dd, 78ff
  • Motor Vehicle Safety Act – 49 U.S.C. § 30172
  • Act to Prevent Pollution for Ships (APPS) – 33 U.S.C. § 1908(a),(b)
  • Lacey Act – 716 U.S.C. § 3375(d)
  • Endangered Species Act – 16 U.S.C. § 1540(d)
  • Fish and Wildlife Improvement Act – 16 U.S.C. § 7421(k)

Under qui tam statutes, whistleblowers are rewarded in lawsuits that result in recovering funds initially lost to fraud or other violations. Although the FCA specifically covers the federal government, qui tam lawsuits can be enforced at the state level if there is a false claims act in that state.

Why File a Qui Tam Lawsuit?

If an organization or individual is found liable under the FCA, the consequences are substantial – but justified. Defendants in FCA qui tam lawsuits are liable for three times the amount of monetary harm they caused, plus penalties for each false or fraudulent claim. Penalties now range from approximately $11,000 to $23,000. Although this may seem like a lot at first glance, many companies found liable under the FCA have been stealing taxpayer dollars by falsely billing the government for years and for millions, sometimes billions, of dollars.

If the government steps in and takes over the case, the reward amount is between 15% and 25%. If the government doesn’t intervene, but the lawsuit is successful, the minimum whistleblower reward is between 25%-30% of the recovered money. The precise amount paid to the relator depends on how much evidence was disclosed or how much effort went towards the lawsuit’s success. The Department of Justice of looks at a variety of factors in determining the award amount including:

  • What was the significance of the information provided to the government?
  • What was the contribution of the person bringing the action?
  • Was the information previously known to the government?
  • Did the whistleblower report the fraud promptly?
  • Upon learning of the fraud, did the whistleblower attempt to stop it or report it to a supervisor?
  • Did the qui tam filing or investigation cause the defendant to stop the fraudulent practices?
  • Did the complaint expose a nationwide practice?
  • Did the whistleblower have extensive, firsthand details of the fraud?
  • Was there a substantial, adverse impact on the whistleblower because of filing the complaint?
  • How did the whistleblower learn of the fraud?
  • Was the whistleblower involved in the illegal activity?
  • The award is generally resolved by negotiation between the Department of Justice and the qui tam plaintiff’s lawyers. The court will become involved if there is no agreement.

Of the $2.8 billion recovered in 2018, more than $2.1 billion resulted from cases filed under the qui tam provisions of the FCA. The government paid whistleblowers $301 million for exposing false claims and fraud by filing these lawsuits. The statistics are similar for 2019, when the government recovered over $3 billion dollars, and $2.1 billion was received based on whistleblowers coming forward to expose illegal conduct. Whistleblowers were again awarded hundreds of millions for their courage.

How are Whistleblowers Protected?

Although having a qui tam lawsuit under seal gives investigators time to delve into the alleged wrongdoings without interference, there is another purpose. It helps protect the identity of the whistleblower.

However, the person’s identity probably won’t remain a secret throughout the entire process. Almost all qui tam complaints are eventually unsealed, ultimately revealing the identity of the whistleblower. But, this may not be for years while the government investigates allegations of fraud secretly – keeping the identity of the whistleblower confidential during that time.

The worker who files the complaint is often the victim of retaliation. The worker may be harassed or snubbed by colleagues and managers. It is not uncommon for a relator to be suspended, demoted, denied a promotion, or fired.

Under the False Claims Act and its many state equivalents, the law protects whistleblowers from retaliation – or at least allows them to be compensated if they are retaliated against. 31 U.S.C. § 3730(h) is the provision of the False Claims Act that makes retaliation against whistleblowers illegal – and the protections are broad.

Employees are entitled to relief if they are “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against” in terms of their employment because of “lawful acts done by the employee … in furtherance of an action under [the FCA] or other efforts to stop 1 or more violations.”

When whistleblowers are retaliated against, under the FCA they are entitled to:

  • Reinstatement or front pay
  • Double back pay
  • Prejudgment interest
  • Special damages (including emotional distress)
  • Attorney’s fees
  • Costs

Contact Our National Whistleblower Attorneys Today

If you have information about fraud, corruption, or wrongdoing and you can no longer remain silent, it’s important to step forward and stop the unlawful behavior. However, it’s also essential to understand your rights and know what to expect before taking any action. Halunen Law has decades of experience in both the private and public sectors of enforcement. Having an experienced whistleblower lawyer on your side can help you navigate the process and ensure you receive the protection and reward you deserve.

Attorneys at Halunen Law will fight for your rights and have successfully represented clients against corporations that have broken the law. Contact us today or call 866-523-8533 for a free consultation if you believe you have grounds for a false claims case.

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QUESTIONS? WE HAVE ANSWERS

The False Claims Act is a whistleblower statute. It allows ordinary citizens to file a lawsuit on behalf of the United States against companies and individuals who steal taxpayer money by committing fraud against the government. When the government is successful in recovering fraudulently obtained money, the whistleblower is entitled to 15% – 30% of those funds. That’s $150,000 – $300,000 if the government recovers $1,000,000!

Yes, many people call these “qui tam” cases because they allow an individual to challenge fraud by standing in the shoes of the government. “Qui tam” (pronounced “kwee tam” or “key tam”) comes from a Latin phrase used in England for a person “who brings the action for the king as well as himself.”

A potential False Claims Act case occurs anytime a company or individual engages in fraudulent conduct that causes the government to pay money it would not otherwise pay.

Covered fraud can include:

  • Medicare, Medicaid, pharmaceutical, and other healthcare fraud
  • Defense contractor fraud
  • Abuse of government contracts/procurement/Small Business processes
  • Illegal kickbacks
  • Misuse of government grants and funds
  • Billing the government for items or services not received

Most anyone who knows about fraud against the government can bring a case. This includes employees (current and former), independent contractors, competitors, clients, and patients. However, it is essential to work with an experienced False Claims Act lawyer who knows how to prepare the case for the government.

If you are aware of fraud against the government, Halunen Law is ready to help you figure out whether you have a case under the False Claims Act or other whistleblower statues. If you have experienced retaliation for reporting fraud, we can make a claim for that as well. We are experienced False Claims Act attorneys and represent whistleblowers on a contingency basis.

Contact Us For Help

Our firm’s Minnesota employee rights lawyers are available to advise you about your legal rights and your options for moving forward. Contact us at 612-605-4098 or toll free at 866-523-8533 for assistance.