Expert Answers to Whistleblowers' Most-Asked Legal Questions

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Expert Answers to Whistleblowers' Most-Asked Legal Questions

What Is The False Claims Act?

The False Claims Act allows individuals to sue fraudsters on behalf of the government. As a reward for their efforts, the whistleblowers can then receive a 15-30% share of any monetary recoveries if using the proper claims process. 

Typically, False Claims Act cases involve defendants who submitted false claims for payment to the government. Any company or individual who bills a government program for goods or services can potentially be sued under the False Claims Act. 

The most common types of fraud involve overbilling, billing for defective products or substandard services, and billing for services never rendered. Whistleblowers can sue fraudsters under the federal False Claims Act and/or state False Claims Acts.

What Is a Whistleblower Case?

Anyone who has information about fraud against the government can file a complaint under the appropriate legislation. 

A whistleblower case involves an individual who brings a lawsuit against an alleged fraudster on behalf of the government, a fraud investigation, and an outcome that may include a verdict or settlement, often amounting to millions of dollars. There are many different whistleblower programs, which allow tipsters to receive a share of the funds recovered as a result of their efforts.  

Whistleblower cases filed under the False Claims Act (“FCA”) involve fraud that caused the government to incur financial losses. Fraud against Medicare, Medicaid, TRICARE, etc., is reported under the FCA. If the fraud has harmed investors, industry insiders can file a complaint under the SEC’s whistleblower program. 

Tax fraud cases are filed under the IRS’s whistleblower program. If the fraud involves banking and financial institutions, whistleblowers can sometimes file a complaint under FIRREA and FIAFEA. 

When the defendant operates in various states, you can sometimes sue simultaneously on behalf of the federal government and one or more state governments. In these cases, failing to file a complaint in a certain jurisdiction may cause you to miss out on substantial awards. Consult with your whistleblower attorney to ensure you are filing your complaint in every relevant jurisdiction.

What Is The Meaning of "Qui Tam"?

Qui tam is the technical term for the False Claims Act mechanism that enables individuals to sue fraudsters on behalf of the government. It originates from a Latin phrase stemming from English common law: “qui tam pro domino rege quam pro se ipso in hac parte sequitur” (he who brings an action for the king as well as for himself.) 

A qui tam action is a whistleblower lawsuit. When an individual files a qui tam action, the government may decide to intervene. When it does not intervene, the tipster may proceed on their own. 

Since the False Claims Act was implemented, qui tam lawsuits have led to the recovery of billions of taxpayer dollars.

What Is a Relator?

A whistleblower who files a complaint under the FCA is referred to as a relator. Whistleblower cases are commonly identified as U.S. ex rel. [whistleblower’s name] v. [defendant]. Ex rel. is an abbreviation of "ex relatione," which means “arising out of the relation of.”  

What Types of Misconduct Are Covered by The False Claims Act?

Fraud involving any program funded by the government is generally covered by the FCA. This includes government contractors falsifying information relating to the quality or cost of their products or services, healthcare providers billing Medicare for services that were either never rendered or medically unnecessary, overbilling, anti-kick violations, etc. 

Who Is Eligible to Become a Whistleblower?

Most whistleblowers file complaints against their employers after observing fraudulent behavior at their place of work. However, anyone with original information about fraud can file a whistleblower lawsuit. People who work for a client, partner, or associate of the fraudsters have been known to successfully file qui tam actions and secure rewards. 

In order to succeed as a whistleblower, you need to provide original information (not included in a previous complaint) and sufficient evidence. Check out our 6 Things Successful Whistleblowers Never Do blog post for some don’ts. 

Foreign citizens and, in some cases, even individuals who participated in the wrongdoing may be eligible for whistleblower rewards.  

Can Foreign Citizens Become Whistleblowers in The U.S.?

The only requirement to file a whistleblower complaint in the U.S. is that you must have information about fraud against our government. Regardless of your nationality or where you live, you may be eligible for a substantial award. Likewise, the defendants may also be foreign nationals or foreign corporations.  

Can Whistleblowers Who Participated In Misconduct Receive an Award?

If the fraud was part of your everyday job, if you followed instructions from supervisors, or participated in wrongdoing unknowingly, you may still be eligible for a whistleblower award. On the other hand, individuals who planned or initiated a fraudulent scheme or were convicted in connection with it, are barred from receiving a reward. 

How Is False Claims Act Liability Calculated?

Violators of the False Claims Act are liable for three times the amount the government lost through the fraud. Additionally, civil penalties for each false claim submitted can go from $5,500 to $11,000. Considering that companies often submit thousands of claims for payment for goods and services to the government, verdicts and settlements in this type of case often amount to millions of dollars.

What Kind of Rewards Can FCA Whistleblowers Receive?

False Claims Act whistleblowers are entitled to a 15-30% share of any recoveries resulting from a  favorable judgment or settlement. The maximum award if the government intervenes is 25%. If the whistleblower proceeds on his/her own, the award can be as high as 30%. These percentages are determined in terms of the significance of the tipster’s contribution to the case.  

How Much Time Do I Have to File a Whistleblower Lawsuit?

(Statute of Limitations)

FCA whistleblowers have six years to file a lawsuit. SEC whistleblowers have five years. IRS whistleblowers usually have three years, but the statute of limitations does not apply when the tax evasion surpasses 25% of the relevant taxable income. Under FIRREA, banking fraud whistleblowers have 10 years to file a complaint. To learn about the deadline to file your specific case, and maximize your chances of securing a reward, consult with a whistleblower attorney.

How Is Life After Becoming a Whistleblower?

Whistleblowers are heroes. They help recover taxpayer money and hold fraudsters accountable. It takes courage to embark on such a journey. Employers often retaliate against tipsters, firing them, demoting them, or reducing their hours. Since whistleblowers cannot talk about their case, sometimes it is hard for them to endure the years that often go by before their case is resolved. 

While the media may sometimes portray whistleblowers as people motivated by greed, it takes great courage to speak out about fraud. With the help of an experienced attorney, they sometimes secure multi-million-dollar rewards that help make up for the stress they usually endure throughout the process. 

If they have faced retaliation, whistleblowers can also seek damages by filing a separate lawsuit under the abundant anti-retaliation protections included in whistleblower legislation.

Is It Possible to Remain Anonymous as a Whistleblower?

FCA lawsuits are filed under seal to allow investigators to do their job without alerting fraudsters. If the case goes to court, however, your identity may be revealed. 

If you become an SEC whistleblower, you may remain anonymous throughout the process, even after you receive an award. Employers can often guess who has blown the whistle, so you have to be very careful at every step. 

Everything you discuss with your attorney is confidential, so, if you possess sensitive information or are in a position that requires that you remain anonymous, you can discuss your options with them. As whistleblower attorneys, we are used to handling this type of situation, and we have helped many tipsters remain anonymous.

Should I Report Corporate Misconduct to an Internal Fraud Hotline?

Our attorneys generally advise against reporting internally, unless required by law, because this type of fraud reporting efforts usually ends with retaliation and destruction of the evidence, thus killing your chances of receiving a reward. Workers who speak out to Human Resources or compliance departments are often alienated, to the point that they sometimes end up resigning, if they are not fired first. 

It is sometimes hard to guess whether misconduct is part of an organization’s culture or the work of a few corrupt individuals, and the only way to secure a reward is by filing a lawsuit with the help of a whistleblower attorney.  

Can I Become a Whistleblower by Calling a Government Fraud Hotline?

In most cases, individuals who report to government hotlines will not receive a reward. The government has insufficient resources to investigate every claim, and individuals who do not file a lawsuit may be ineligible for awards. Government officials take whistleblower complaints more seriously than hotline reporting, especially if they are filed by respected attorneys with experience in our field.

I Filed a Whistleblower Complaint, What Can I Expect Now?  

A government investigation into your fraud claims can take months and often years. Officials will likely interview you and your witnesses, and evaluate your evidence. False Claims Act cases are filed under seal. Though the period of confidentiality—to allow the government to investigate—is officially sixty days, there are usually many extensions. 

Sometimes after a year or two, the government is confident that it has enough evidence and will perhaps raid corporate offices in search of further proof of misconduct. Because raiding headquarters will reveal that an investigation is ongoing, this is usually done in the later stages of the process. 

After evaluating all the elements of the case, the government will decide whether it wants to intervene or not. If it chooses to join your lawsuit, the case will go to court, and unless there is a settlement, it will be heard by a jury. 

What If The Government Does Not Join My Whistleblower Lawsuit?

You may proceed with your lawsuit even if the government declines to intervene. If you succeed in this scenario, the award will generally be higher. Inexperienced attorneys, however, tend to drop cases when the government decides not to join a whistleblower lawsuit. 

This is one of the reasons you should work with someone who has a track record of success and enough resources to pursue a case even without the government’s involvement.

Can I Blow The Whistle About Anti-kickback Violations?

If you have information about healthcare providers who have offered kickbacks in exchange for prescriptions or patient referrals, you may file a fraud lawsuit. Anti-Kickback and Stark laws prohibit this type of conduct. 

Dishonest medical providers have been known to offer bonuses, expensive travel, and inflated speaking fees to physicians in exchange for lucrative referrals of Medicare and Medicaid covered patients. This can be grounds for filing a whistleblower lawsuit under the False Claims Act and can lead to substantial rewards.

What Is Procurement Fraud?

Procurement fraud relates to misconduct involving government contracts. Government contractors are bound by law to provide industry-standard services and competitive pricing. Contractors who defraud the government can be prosecuted under the False Claims Act.   

Can I File a Whistleblower Lawsuit Against a Healthcare Company That Defrauded a Private Insurer?

While it is more common to sue companies that defrauded government healthcare programs, some states allow individuals to file a lawsuit and receive awards if they have information about fraud against private health insurers. Consult your attorney to learn about the applicable legislation in your state.  

What Is The FCPA?

The FCPA (Foreign Corrupt Practices Act) is designed to prevent U.S. corporations from bribing corrupt foreign officials to secure lucrative contracts. Under Dodd-Frank, whistleblowers can report these types of violations to the SEC. Recently, a tipster received a $4.5 million reward in a landmark FCPA case. 

How Much Does It Cost to Hire a Whistleblower Attorney?

As whistleblower attorneys, we evaluate each case confidentially and free of charge. If we think your case has merit—and potential to lead to an award—we can enter into a contingency fee arrangement with you. This means that we will invest time and resources to bring your case to a successful resolution, and you will only pay if you receive a whistleblower award. 

In that case, we will receive a percentage of your award, and sometimes the defendant will pay our fees and expenses. Our attorney-client agreement will lay down exactly how an eventual award will be divided.

To find out how we can help you report fraud and collect your cash award, please contact our Orange County whistleblower litigation attorneys today:

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David Kani

David Kani is a Southern California based trial lawyer with a focus on class actions and whistleblower (False Claims Act, SEC and others) cases.

To connect with David: [hidden email] or 714-907-0697.
To learn more about David: davidkani.com

Read David's ebook: The Smart Whistleblower's Playbook
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David Kani & Steve Hochfelsen are represented by Elite Lawyer Management, managing agents for America's best attorneys.