A whistleblower is aware of activities that defraud the United States government or state governments and is willing to do something about it. They could be a healthcare professional who has evidence that Medicare is being billed for services that were medically unnecessary or not provided. They could be the employee of a defense contractor who has uncovered systematic overcharging for military parts and services or someone with knowledge of a scheme to deceive investors or avoid paying corporate taxes. Whistleblowers, you have become a valued asset to government agencies who seek to prevent fraud. The monetary awards that are paid to whistleblowers increasingly reflect that value.
The whistleblower is nearly always someone with information that has not been previously disclosed. Each of the major whistleblower laws reference this aspect of whistleblowing in its own way. These laws make it clear that the government is most interested – and most inclined to reward – whistleblowers who bring cases based on “original information” that would not otherwise have come to the government’s attention. In some cases, a claim may be dismissed if the whistleblower’s allegations were previously disclosed in the news media or as the result of a federal investigation – unless the whistleblower was the original source of those allegations.
Contacting an Attorney
An individual who has knowledge of fraudulent practices that are harming the government or consumers and is considering taking action should begin by contacting a law firm that is experienced in the complexities of whistleblower law. There are many questions and aspects of whistleblower law that are best reviewed with an attorney before the whistleblowing process begins. A short list might include the following:
- What laws apply to the information that the whistleblower wants to reveal? There are four major federal whistleblower laws (see discussion below) and numerous state laws that might also apply to a particular claim
- Should the whistleblower tell their employer what they know before they contact the appropriate government agency? The answer to this question might vary depending on the facts of the case and the type of fraud the whistleblower is reporting
- Which government agency should be contacted and what is the proper way to report what is known? Failing to file a whistleblower claim properly can disqualify the whistleblower from possible rewards.
- What is the best way to protect the whistleblower from retaliation by their employer?
- Whistleblowers must know what they can and cannot do in the process of gathering evidence in order to blow the whistle on fraud.
An attorney will discuss these issues, and others, with the whistleblower and help him or her properly file a claim as quickly as possible. This can be critical to government acceptance of the claim and receiving an award. If someone else has already filed a claim based on similar information, or if the government has already begun an investigation, the whistleblower’s right to pursue the case may be denied. Different state and federal whistleblower laws also have varying statutes of limitation – deadlines for filing and reporting – that must be met. If that deadline is missed, the right to take legal action may be lost.
Whistleblowers who desire to remain anonymous during the whistleblowing process will also benefit from legal counsel, and filing an anonymous claim may require being represented by an attorney. Although anonymity cannot be guaranteed, the identity of the whistleblower will generally remain undisclosed while a government investigation is ongoing.
Federal Whistleblower Laws
There are four major whistleblower laws that are employed to address fraud against the government.
- The False Claims Act (FCA) covers federal spending, contracting and procurement. Fraud involving healthcare (including Medicare and Medicaid, hospice care, and the pharmaceutical industry), defense contracting and aerospace, and the housing and mortgage industry, falls under the FCA. This act allows private citizens to file whistleblower (qui tam) lawsuits on behalf of the government and to potentially receive a significant reward based on a percentage of any money recovered.
- The Internal Revenue Code contains whistleblower provisions that were strengthened with the passage of the Tax Relief and Health Care Act of 2006. Whistleblowers who report information on significant underpayment of taxes or tax fraud by corporations or individuals will be covered by this law.
- Fraud related to stocks, securities, or commodities is covered under the Securities Exchange Act and the Commodities Exchange Act. Both Acts were amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to add significant whistleblower provisions.
For more information on each of these laws and how they might apply to your own whistleblowing, continue on to our How to Blow the Whistle page.