Whistleblower Glossary of Terms 2017-02-06T14:07:32+00:00

Whistleblower Glossary of Terms

Whistleblower-Glossary-qui-tam-lawyers

Aerospace Fraud
Aerospace fraud occurs when companies or organizations that manufacture aircraft, missiles, space vehicles, propulsion units and related products make false claims about the products they are contractually producing for the United States Government. Aerospace fraud and defense contractor fraud overlap, mostly because the companies involved in receiving government contracts are defrauding the government in similar ways.

The most common types of aerospace fraud include:

  • Improper payments to government officials in attempts to receive government contracts.
  • Financial statement manipulation, which includes intentional manipulation of cost estimates and overstating the value of products.
  • Improper or unauthorized component substitutions.
  • Delivering defective products.


Act (as it applies to legislation)
On this website you will read about various federal laws called acts, such as the Dodd-Frank Act.  An act in this sense is a law passed by the U.S. Congress. An act starts as a bill – a draft of proposed legislation. It will be referred to as a Senate bill (e.g., S. 465) or a House of Representatives bill (e.g., H.R. 1235) and it will have a “short title” containing the word act. The Dodd-Frank Act, for example, began as H.R. 4173. Its short title was the “Dodd-Frank Wall Street Reform and Consumer Protection Act.” When it was passed by Congress and signed by the President it became a law, or statute, and was known by its short title, or the even shorter “Dodd-Frank Act.”

All of the permanent statutes of the United States can be found in the United States Code. The U.S. Code is arranged by subject matter into sections called Titles. An act may amend several previous acts or statutes. The Dodd-Frank Act, for example, amended two previous acts: the Securities Exchange Act and the Commodities Exchange Act. Those acts, as now amended by the Dodd-Frank Act, can be found in Title 15 and Title 7, respectively, of the U.S. Code.

Code (legal definition)
An organized set of laws.

Defense Contractor
A defense contractor, also known as a military contractor, is a business or organization that manufactures products or provides services to the defense department of a government. Most commonly, products manufactured by defense contractors include aircrafts, weapons, ships, vehicles and electronic systems. Common services provided by defense contractors also include technical training and support, logistics, consulting and engineering.

Defense Contractor Fraud
Defense contractor fraud occurs when defense contractors make false claims about products or services they are selling to the government.
The most common types of defense contractor fraud are:

  • Violations of the Truth in Negotiations Act (TINA). This occurs when defense contractors bid for government contracts and artificially inflate the potential costs associated with manufacturing products or providing a service to the government.
  • Cross charging, which occurs when defense contractors overcharge the government for labor or material costs.
  • Failure to comply with the specifications of a government contract. This involves  knowingly producing inferior products or services, or manufacturing products using shoddy materials.
  • Improper cost allocation. This simply means that defense contractors charge the government for erroneous things not associated with the manufacturing of a product or the administration of a service in a contract.
  • Product substitution, which refers to defense contractors using sub-par materials in the production of a product without informing the government.


Dodd-Frank Act

The Dodd-Frank Act is perhaps the most significant financial regulatory reform legislation in the United States since the Great Depression. The Act has many different provisions, primarily dealing with oversight and regulation of financial companies, as well as providing for significant changes to corporate governance and the securities market. Within the Act are regulations that are designed to combat corrupt practices by public companies with operations abroad. Of great interest is a whistleblower provision that is designed to reward and protect any individual that exposes securities violations to the Securities and Exchange Commission (SEC), including offenses that violate the Foreign Corrupt Practices Act.

False Claims Act
Federal False Claims Act / False Claims Act of 1986
A federal law that permits anyone who has knowledge regarding a company or individual committing fraud against the United States government to file an action to recover any damages resulting from the fraud. This ‘action’ is also referred to as a qui tam lawsuit.  Read more about this law on our False Claims Act page.

  • State False Claims Act
    In addition to the Federal False Claims Act, there are a number of states that have adopted False Claims Acts of their own to help the fight against fraud at the state level. California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Louisiana, Massachusetts, Nevada, New Mexico, Tennessee, Texas and Virginia all have their own state False Claims Acts. New York City and Chicago have also adopted municipal False Claims Acts to help combat fraud. See state laws.


Foreign Corrupt Practices Act

The Foreign Corrupt Practice Act (FCPA), also known as the Bribery Act, prohibits any corporation with business holdings in the United States (also known as an “issuer”) from bribing a foreign official or committing other criminal acts in order to obtain or maintain business. The FCPA Act also prohibits any citizen, resident, national, partnership, joint-stock company, unincorporated organization, business trust, or sole proprietorship that makes the United States its home base for business (also known as a “domestic concern”) from engaging in this type of corrupt conduct. Read more on our FCPA page.

Fraud
Fraud, as defined in Black’s Law Dictionary (10th edition), is “[A] knowing misrepresentation or knowing concealment of a material fact [a fact that is important or essential] made to induce another to act to his or her detriment.” It is the intentional use of deceit or dishonesty to mislead a person or other entity (e.g., the U.S. government) in order to get them to take an action that results in injury or damage.

  • Consumer Fraud
    Consumer fraud occurs when a product or service is represented or advertised in a different manner than the product or service’s actual performance or cost. Consumer fraud covers a wide range of dishonest practices in the advertising, marketing and sale of a product or service. Common types of consumer fraud include:
  • Overcharging or improperly charging consumers for products or services.
  • Imposing unfair or unclear terms and conditions in standard form contracts in an effort to take advantage of the consumer. This often includes the levying of hidden fees or charges for products or services.
  • Advertising and marketing their products or services as safe when in fact the product or service is dangerous when used as directed.
  • Corporate Fraud
    Corporate fraud simply refers to dishonest or illegal actions taken by a company in order to gain an advantage and/or create a loss for another individual or company. One single person or an entire staff of a company can instigate corporate fraud. The most common types of corporate fraud include:

    • Theft of cash, physical assets or confidential information.
    • Misuse of accounts.
    • Payroll fraud.
    • Misstatements in financial accounting.
    • Bribery and corruption.
    • Falsifying documents


Healthcare Fraud (Government)

In order to receive reimbursement from Medicare or Medicaid, healthcare providers are required to produce specific information, including detailed records when filing a claim. Fraud is committed when an individual or corporation files a claim to obtain reimbursement from the government for healthcare products or services under false pretenses.

Some examples of government healthcare fraud include:

  • Charging for services or products that were never supplied
  • Unlawful kickbacks or financial incentives from corporations to healthcare professionals
  • Unbundling or upcoding services
  • Falsifying records
  • Filing claims for services that aren’t medically necessary


Kickback

Kickbacks are improper payments made to companies or individuals to gain business or favorable treatment.  These bribes can take many forms, including money, free equipment, and luxury vacations.

Medicaid
Medicaid is a government health insurance program that provides coverage to families and individuals who are unable to afford it. The program is funded jointly by federal, state, and local governments. It is administered by state and local governments according to federal guidelines.

Medicare
Medicare is a program funded by the United States government that provides health insurance coverage to people over the age of 65.

Medicare Fraud
Medicare fraud occurs when a person or company makes false claims in order to receive Medicare healthcare reimbursement. There are many types of Medicare fraud, but every type is just another attempt to steal money from the U.S. Government.
The most common examples of Medicare fraud include:

  • Billing Medicare for medically unnecessary procedures, tests or equipment, or misrepresenting the total costs associated with each.
  • Billing for medical procedures never performed, or overbilling for services and medical equipment actually provided.

Off-Label Marketing
Before any pharmaceutical drug reaches the public market, the Federal Food and Drug Administration (FDA) and drug manufacturers agree on the specific language of a drug’s purpose, dosage, intended effects, administration, and any other information to be included on the label and within the packaging. In other words, the FDA approves drugs for very specific conditions also known as indications. For example, a drug that is approved for the treatment of epilepsy may not be approved for the treatment of pain. A drug approved for adults may not be approved for use by children.

Off-label marketing refers to pharmaceutical companies advocating the use of a drug to treat conditions that are not among those for which the drug has received specific FDA approval. This is considered illegal if the advocacy is not executed in accordance with strict FDA regulations. A typical and routinely occurring example of off-label marketing is when drug companies offer financial incentives to doctors in exchange for writing more off-label prescriptions. According to studies, 25% of all drugs are prescribed off-label. This statistic increases even more in the field of psychiatry; where over 30% of drugs are prescribed off-label. A doctor may prescribe a drug to treat conditions other than those for which the drug has received FDA approval, but drug makers are prohibited from directly promoting their drugs for unapproved uses.

Pharmaceutical Fraud
Pharmaceutical fraud occurs when drug manufacturers intentionally deceive the public, most commonly by making false marketing claims, engaging in unlawful pricing and sales practices, off-label promotion, and giving kickbacks to doctors.

Plaintiff
A plaintiff, also known as a claimant or complainant, is a party (individual or group) that initiates an action in a court of law.

Qui Tam
Qui Tam is a shorthand version of a Latin phrase meaning “who as well for the king as for himself sues in this matter.”  A qui tam law suit filed by a private citizen can result in wrongdoers paying back any money they have received fraudulently.  Under the Federal False Claims Act, a qui tam action, also known as a whistleblower lawsuit, allows the private citizen who brings the fraud to light to prosecute the company, generally with the help of the government.   The person or persons responsible for bringing the qui tam action are entitled to share in any money recovered by the government.  Whistleblowers are generally eligible to receive between 15 and 25 percent of the money recovered by the government, depending on their individual contributions to the success of the case.

Qui Tam Act
See False Claims Act

Relator
A relator is a legal term that refers to the individual or party who comes forward with, or ‘relates’ facts upon which a qui tam action is based. A relator is also known as a whistleblower.

Securities
The word “securities” is generally used to refer to stocks, bonds, and related financial “instruments” (documents with monetary value), such as derivatives. A stock represents ownership of a publicly traded company. A bond is a loan by an investor to a company or governmental entity for a defined period of time at a particular interest rate. A derivative is a financial instrument that derives its value from an underlying asset, such as a stock, bond, or commodity.

Statute (see Act)

Taxpayers Against Fraud (TAF)
Taxpayers Against Fraud is an organization dedicated to stopping fraud against the United States government. Its mission is to educate the general public, legal community, government officials, media personnel and any other parties interested in the Federal False Claims Act. TAF also works closely with qui tam plaintiffs and attorneys to assist in developing and successfully litigating qui tam cases. For more information, click here: www.taf.org.

United States Code (U.S. Code, or U.S.C.)
The United States Code is defined on the website of the U.S. House of Representatives as “a consolidation and codification by subject matter of the general and permanent laws of the United States.”

Whistleblower
The term whistleblower originates from the practice of law enforcement officials in Britain blowing their whistles when they noticed a crime being committed. Today, a whistleblower generally refers to someone who raises concern over possible wrongdoing by a company or individual those results in fraud against the government or harm to the public safety. There are internal whistleblowers that bring these allegations to the attention of the accused organization itself, and external whistleblowers that make their allegations of misconduct known to law enforcement agencies, government regulators or the media.

Whistleblower Act
See False Claims Act