A "whistleblower" is anyone that has original information about fraudulent or unethical conduct that has resulted in Health Care Fraud, Tax Fraud, Mortgage Fraud, or Federal Securities Law Violations. Examples include:
- Overpayments by the federal government for products or services, including payments made by Medicaid, Medicare, and TriCare for health care services and prescription drugs.
- A corporation avoiding federal (and in some cases, state) tax laws and underpaying taxes.
- A corporation violating the federal securities laws.
There are three general federal laws or programs that provide financial awards to whistleblowers: the False Claims Act, the IRS whistleblower program, and the SEC/CFTC whistleblower program. Briefly, they are as follows:
False Claims Act / Qui Tam Lawsuits: "Qui tam" lawsuits are lawsuits brought under the federal False Claims Act for conduct that has defrauded the federal government, including Medicaid and Medicare. The False Claims Act allows private citizens to bring lawsuits on behalf of the federal government against those who have defrauded the government. If the lawsuit is successful, the private citizen that brought the lawsuit may receive an award of 15 to 30 percent of any recovery. Many states also have false claims statutes that allow private citizens to sue to recover state funds.
Tax Fraud: Tax fraud lawsuits are generally brought under the recently enacted IRS Whistleblower law, 26 U.S.C. § 7623, which provides that the IRS shall pay awards to whistleblowers for reporting conduct that has resulted in fraudulent tax underpayments. If the IRS recovers funds as a result of the whistleblower's information, the whistleblower can receive an award of 15 to 30 percent of the total amount collected. IRS whistleblower awards are mandatory and there is no limit on the dollar amount that can be awarded. Unlike the False Claims Act, if the government does not decide to pursue the case, there is no private right of action, or ability for the private citizen to pursue the claim without the government.
Securities Fraud: The Dodd-Frank Wall Street Reform and Protection Act created Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) whistleblower reward programs. These programs provide much more incentives for whistleblowers with knowledge of financial fraud. Under the SEC and CFTC programs, whistleblowers can receive an award of between 10 to 30 percent of any monetary sanctions collected by the SEC, CFTC or other regulatory agencies.
If you think you have a whistleblower case, it is important that you:
- Do not talk to the media or otherwise discuss the facts of the case with friends, colleagues or co-workers. Doing so could jeopardize your ability to bring the case.
- Immediately contact a lawyer who can assist you. Whistleblower cases are subject to statutes of limitation and a number of procedural requirements.