Fraud costs taxpayers billions of dollars every year at every level of government. Healthcare fraud impacts Medicare and Medicaid, taking dollars out of those programs that otherwise would go to much-needed medical care.
Fraud by government contractors hits the budgets of federal, state and local agencies, from the Pentagon to city housing departments. Investigators and prosecutors work with scarce resources to police a virtual tidal wave of wrongdoing.
To help ferret out fraud, the U.S. government, many states, and some cities have False Claims statutes that enable citizens to act as whistleblowers and bring lawsuits on behalf of the government. The Federal False Claims Act is called the “Lincoln Law” because it was first passed under Abraham Lincoln to sanction unscrupulous vendors who sold shoddy uniforms, defective arms, and other substandard supplies to the Union Army.
Under these laws, the whistleblower can receive a significant money reward for bringing non-public information about fraud to the attention of the authorities. As their investigative budgets tighten, these governments increasingly rely on whistleblower actions, known as qui tam cases, to help them discover fraud, and recover ill-gotten taxpayer dollars to their treasuries.
Whistleblowers are a crucial aspect of letting the government know about illegal activity. In fact, the government often might not know about certain kinds of fraud unless a whistleblower steps forward to raise awareness about the situation.
What is a Whistleblower?
A person who sees evidence of or collects information supporting a claim of fraud or illegal activity could be referred to as a whistleblower. However, this person only meets the grounds of the definition for this term if they make someone else aware of the situation. A whistleblower could be a current or former employee who gains knowledge about an activity that is unethical or illegal. Fraud and corruption also fall under this umbrella.
The first step for a typical whistleblower is to make a supervisor or other person in the company aware of the wrongdoing. A whistleblower can also contact an outside third party such as the government or law enforcement. This is known as a protected activity when the whistleblower is participating in good faith. Good faith means that the whistleblower has reason to believe these allegations are real.
Anyone who is accused of fraud or wrongdoing might retaliate against a whistleblower. It’s important for the employee in the position of being targeted to respond accordingly with legal action if necessary. People who raise legitimate concerns of fraud are protected from discriminatory or retaliatory behavior.
Because there are many challenges to being a whistleblower, the government has tried to make it easier for a person with information about fraud or public safety concerns to come forward with minimal backlash. Some of the issues whistleblowers might face include social stigma, criminal allegations, legal action, and termination from a job. However, there are laws in place that protect the activity of whistleblower. An employer who crosses the line and breaks the law could be held accountable in a separate lawsuit.
There are two main kinds of whistleblowers: public and private. Whistleblowing in a public sector organization is more likely to lead to criminal charges for those who are accused of fraud. The government becomes especially interested in taking legal action and getting involved in litigation when federal funds are in play or when it could affect the safety and health of the public.
Whistleblowing can be internal, meaning that the complaint of fraud is directed inside the company, or external, such that the complaint is directed outside to the media or to external authorities.
What Are the Rights of a Whistleblower?
There are numerous laws that address whistleblowers. The Federal Clean Air Act, the Toxic Substance Control Act, the Water Pollution Control Act, the Safe Drinking Water Act, and the Energy Reorganization Act, for example, all address environmental events when an employee steps forward to lodge a complaint about health or safety hazards in the workplace. Furthermore, a claim could be brought under the False Claims Act or claims of fraud referenced in the Dodd-Frank Act.
In order to be protected from demotions, termination, and other activities, a worker must have good reason to believe the employer is indeed violating the law. In addition, the worker must have taken the step of protected activity to report this to someone else.
Many states also have additional protections in place for whistleblowers. Talking to an experienced whisltelblower lawyer could help you determine whether or not you have grounds for a retaliatory case in your state. Reporting the violation, participating in an investigation, refusing to participate in the violation, and testifying in the case are all forms of protected activity that cannot be used by the employer to target the worker for retaliatory actions.
What Happens After a Whistleblower Case is Filed?
When a whistleblower has made a claim internally and no corrective response has been made, the case could develop into a formal lawsuit. When this lawsuit involves government funds, this could enable the government to take an active role in participating in the suit is this is a False Claims Act case.
If the government chooses to participate in an FCA case, the whistleblower might still be entitled to a portion of any recovery. That right to recovery is also active if the government declines to participate. The government does not get involved in all whistleblower cases, but the percentage of the award to which the employee is entitled changes based on what the government does.
The next phase in a whistleblower case is for a formal investigation. This is the government’s period to determine whether or not there are grounds and enough of an interest to take further action. The investigation phase could last for some time. Many whistleblower cases go on for years, so it’s important to know all the steps involved and to be prepared for the long haul. Having all of your evidence already collected and organized is a great first step for any employee who finds evidence of wrongdoing within their company.
Could I be a Whistleblower?
- Do you work for a company that you suspect is committing fraud?
- Do you personally know about fraud going on at a company, even if you don’t work there?
- Has the company lied in its communications to the government, either by making false statements or omitting important information?
- Has the company’s wrongdoing cost the government money, directly or indirectly?
- Has the company kept the fraud a secret; e., has there been no media attention, publicity or investigation into the fraud?
- Have you personally witnessed executives, managers and/or co-workers committing fraud?
- Do you have emails, PowerPoints, memos, spreadsheets or other documents that have false statements, omit important information or show other evidence of fraud?
- Have you complained to your supervisors or to a compliance hotline and gotten no response or a “brushoff, or were threatened or retaliated against as a result?”
- Has anyone at the company threatened your job, salary or advancement because you complained or raised questions about something that didn’t “smell right”?
If you answered “yes” to any of these questions, then you could qualify to bring a qui tam case as a whistleblower, also known in these cases as a “relator” because you “relate” your information to the government. If you also believe you were retaliated against because you tried to blow the whistle, then you may have a separate claim for that wrongdoing.
It is not easy to be a whistleblower. In addition to possibly collecting a reward, many employees who learn of wrongdoing are motivated by wanting to expose fraud and put things right. However, approaching a lawsuit on your own can be daunting, especially If the employer attempts to retaliate against you. Being prepared and having the support of an experienced whistleblower lawyer could help you feel more confident about your situation.
If you think you know of evidence about existing fraud, now is the time to schedule a meeting with a whistleblower attorney to discuss your case and the next steps required. You deserve to have a lawyer familiar with protections for you.