Whistleblower Award | Whistleblower Information

Who is a whistleblower?

Anyone with knowledge that an individual or entity is defrauding the government can be a whisteblower. Typically, whistleblowers are employees or contractors who learn of fraud or other wrongdoing through their employment. However, anyone can be a whistleblower, including competitors. Whistleblowers can receive financial rewards for reporting fraud committed against the U.S. government.

What is a qui tam lawsuit?

A qui tam refers to a lawsuit brought on behalf of the government or the public. Private parties, called relators, prosecute qui tam actions alongside the government, or on their own. The relators’ attorneys prepare the complaint and may even prosecute the lawsuit through trial.

Protections & Rewards

There are dozens of federal and state laws that provide protections and rewards for whistleblowers. The primary protections and rewards are:

Financial Rewards

Depending on the type of claim and several other factors, whistleblowers can be eligible to receive between 10 and 30 percent of the government’s recovery. Since 2011, more than $7 billion in rewards has been paid to whistleblowers under a variety of state and federal laws.

Confidentiality

Most whistleblower laws allow the whistleblowers to keep their identity confidential while the claim is being investigated. Qui tam lawsuits are kept “under seal” and are not available to the public while the claim is being investigated. The confidentiality protections do not apply to all situations and, even when they apply, the accused parties can sometimes infer the whistleblower’s identity based on the evidence provided to the government.

Legal Advice & Disclosure of Information

Section 1833b of the Defend Trade Secrets Act (“DTSA”) protects whistleblowers’ rights to disclose wrongdoing even if the information being disclosed includes information considered to be confidential.. The DTSA exempts whistleblowers from liability for any trade secret disclosure to their attorneys or government officials if the disclosure is made “solely for the purpose of reporting or investigating a suspected violation of law.”

Anti-Retaliation Rights

Under the False Claims Act and other statutes, any employee who is discharged, demoted, or harassed for reporting fraudulent conduct may be entitled to reinstatement, double back pay, punitive damages, and compensation for litigation costs and attorneys’ fees.

Steps in Submitting a Whistleblower Claim

The process for resolving a whistleblower’s claim differs depending on the type of fraud involved and the governing statute.
However, the process typically tracks the following steps:

Step 1: Case Evaluation

Contact an experienced and knowledgeable whistleblower attorney to evaluate your potential case. Whistleblower law is extremely complex, and the law generally rewards only the first whistleblower. In general, a whistleblower loses eligibility for a financial award or bounty if the whistleblower is not the first person to report the fraud.

Step 2: Prepare the Complaint or the Application

With the information and supporting evidence provided by the whistleblower, the whistleblower’s attorneys prepare the appropriate documentation to formally notify the government of the fraud. Frequently, this type of submission requires the assistance of consultants and experts, including accountants and analysts. The type of notification that the whistleblower’s attorneys will prepare depends upon the type of fraud involved.

False Claims Act Claims (e.g., healthcare and pharmaceutical fraud, government procurement fraud, mortgage fraud, and other fraud)

The whistleblower’s attorneys will prepare a complaint that sets out the allegations regarding the fraud and the applicable law and submit it to the appropriate U.S. Attorneys’ Office. The complaint is similar in form and substance to a complaint that is typically filed in federal court to initiate a civil action.

IRS Claims

The whistleblower’s attorneys will prepare the appropriate IRS forms and submit a detailed description of the alleged tax noncompliance as well as evidence supporting the allegations, including copies of books and records, ledger sheets, receipts, bank records, and emails. The whistleblower’s attorneys will also provide the IRS with an explanation of how and when the whistleblower became aware of the claim and the whistleblower’s relationship to the taxpayer.

SEC and CFTC Claims

The whistleblower’s attorneys will prepare a detailed online tip through the government’s Tips, Complaints and Referrals (TCRs) system. The tip explains the nature of the violation and provides the information and evidence to substantiate the allegations. To be eligible for an award, the whistleblower must provide the government with “original information” that “leads to” a successful SEC action and recovery by the SEC.

Step 3: Government Investigates the Claim

After receiving a whistleblower’s claim, the government investigates the whistleblower’s allegations. During this phase, the case remains “under seal” and all information obtained by the government is kept confidential. The whistleblower’s attorneys continue to provide assistance to the government, which can increase the monetary award to the whistleblower.

Step 4: Government Pursues, Intervenes, or Declines

FCA Claims

If the government decides to pursue the whistleblower’s claim, the government will “intervene” in the case and pursue the claims through settlement or trial. If the government declines to intervene in the case, the whistleblower’s attorneys can continue to pursue the case through trial or settlement

IRS Claims

After conducting its investigation, the IRS decides whether to pursue a judicial or administrative action based on the information provided by the whistleblower.

SEC and CFTC Claims

After conducting its investigation, the government decides whether to pursue an enforcement action. If the government declines to pursue an enforcement action, the whistleblower can appeal the denial to an appropriate United States Court of Appeals within 30 days of the SEC’s adverse decision.

Step 5: Final Recovery

FCA Claims

More than 90 percent of all FCA cases accepted by the government (i.e., where the government has intervened) settle. The remaining 10 percent are dismissed or tried. If the government intervenes and the case does not settle, lawyers from Department of Justice will try the case, and, if they are successful in obtaining a recovery, the whistleblower may receive between 15 and 25 percent of the award. If the government declines the case, the whistleblower’s attorneys can try the case on behalf of the government, and, if successful, the whistleblower’s percentage of the recovery is much higher (typically between 25 percent and 30 percent of the government’s total recovery). In addition, if the whistleblower’s attorneys are successful, the defendant is obligated to pay additional amounts for attorneys’ fees and litigation expenses.

IRS Claims

The whistleblower is entitled to an award percentage of between 15 and 30 percent of the proceeds collected and attributable to the whistleblower’s information.

SEC and CFTC claims

If the whistleblower provides “original information” that “leads to” a successful SEC or CFTC action, the whistleblower is entitled to a reward that can range between 10 percent and 30 percent of the government’s recovery.