Whistleblower Claims

Whistleblowing is the act of reporting specific violations of law, regulations, or policies that defraud the government or harm investors. The process for whistleblowing differs based on the nature of the conduct and whom it harms. The law protects whistleblowers from retaliation and gives them rewards for successful claims.

There are several types of whistleblower programs. These whistleblower cases generally fall into one of these two broad categories:

• Lawsuits under the “qui tam” provision of the False Claims Act (FCA) alleging fraud against the government. Whistleblowers who bring these claims are called “relators.”
• Submissions to government regulatory and law enforcement agencies such as the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Department of Justice (DOJ) and Internal Revenue Service (IRS). These submissions are often called a tip, complaint or referral, or TCR for short.

The process for each of these categories of claims is different. The links above will take you to pages that explain the process for each type of submission. The reporting method depends on the nature of the illegal activity, which law the activity violates and whom the activity harms. Whistleblower attorneys can help people navigate all these variables.

What can whistleblowers report in a qui tam lawsuit?

Whistleblowers can file a lawsuit under the qui tam provision of the False Claims Act to report any activity that defrauds the government or costs it money. This may include:

• Health care related fraud: Allegations that a hospital, a doctor, a medical practice, a pharmaceutical manufacturer, a pharmacy chain, or some other participant in the health care system has defrauded federal or state health insurance programs such as Medicare, Medicaid, TRICARE or the VA  
• Procurement fraud: Allegations that a defense or civilian government contractor, or individual or company from which a government agency purchases goods or services, cheated the government
• Financial fraud: Allegations that persons or institutions involved in underwriting government financing misled or overcharged government agencies
• Benefits fraud: Allegations that someone received government benefits or a grant or loan from the government by falsely claiming they were eligible for the government money or by failing to use the money for the use for which it was intended
• Data protection fraud: Allegations that a recipient of government money falsely certified compliance with regulations relating to data protection

What can whistleblowers report in an agency whistleblower submission?

Many government agencies have whistleblower programs designed to help each agency enforce the laws for which it has responsibility. 

For example, whistleblowers can report tax fraud to the IRS. Examples of common IRS whistleblower claims include allegations of:

• Falsifying financial statements
• Taking false deductions or credits
• Underreporting income
• Withholding payroll taxes without remitting them 

The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) regulate financial markets. Examples of common CFTC and SEC whistleblower claims include the following:

• Broker or dealer fraud
• Deceptive or misleading practices by securities issuers
• False or fraudulent statements in public or private offering documents
• Reporting false or misleading information to benchmarks like LIBOR
• Deceptive or misleading practices by investment advisers
• Corporate bribery
• Insider trading, front running and other illicit use of material nonpublic information
• Ponzi or pyramid schemes
• Market manipulation
• Self-dealing or theft of funds

A whistleblower can be almost anyone who observes (but did not participate in) fraudulent or illegal activity and has the courage to report it. Whistleblowers do not need to have a certain degree, work in a certain field, or be a certain age. If you see a violation that harms the government or the investing public and have evidence of it, you can report it.

Whistleblowers have certain legal protections. If you’re worried about retaliation (such as your employer committing fraud and you being fired after reporting it), there may be laws that protect you. If your whistleblower lawsuit or agency submission results in a recovery by the government, then you may be able to receive a share of that recovery.

Who can be a whistleblower? 

Historically, the most successful whistleblowers have been company insiders, such as employees or former employees of the company that committed fraud. These people observed the fraud or illegal conduct firsthand and could provide detailed accounts of what happened. 

But being an insider isn’t required to file a tip or whistleblower case. Many successful whistleblowers come from outside the wrongdoing company. This could include contractors, customers, competitors and victims of company wrongdoing. Friends, family members, acquaintances, government employees and ordinary witnesses can all be whistleblowers. Even “home detectives” who discover fraud by mining through publicly available data and connecting the dots to reveal fraud can become whistleblowers in some situations.

How do whistleblowers report wrongdoing?

Whistleblower reporting differs depending on what you are reporting and to whom. 

• For qui tam cases, the whistleblower must engage a lawyer to file a complaint in court. The complaint is filed “under seal” and served to the government so that they may investigate the claim.
• For agency whistleblowing, the first step is to fill out a tip, complaint, or referral (TCR) or other submission form with the correct agency. Most agencies have online submissions, tip hotlines and other resources to help. Although hiring a lawyer is not required for these claims (unless you wish to proceed anonymously), lawyers can help you navigate the process, improve your agency whistleblower submission, protect yourself from retaliation and help claim your reward.

There are laws to protect people from whistleblower retaliation after they report misconduct. In some cases, whistleblowers can remain anonymous, though this may affect their eligibility for financial rewards. Lawsuits brought under the False Claims Act (FCA) stay secret for at least 60 days while the government investigates, but they will eventually become public. In most cases, agency whistleblower submissions will remain confidential, but sometimes companies can piece together who reported them.

In situations where the whistleblower can’t be anonymous or where the case becomes public, whistleblower laws provide people with important protections from retaliation. Specifically, employers aren’t allowed to retaliate against employees who report fraud or other misconduct to the government. If they do, they may be required to pay for the damages, including: 

• Attorney fees
• Back pay and front pay
• Court costs
• Out-of-pocket costs
• Punitive damages

A lawyer with experience in whistleblower cases can help protect your interests. Motley Rice knows the steps necessary to protect whistleblowers and advocate for the compensation they deserve for taking important risks to achieve justice. Contact us today for a confidential consultation on your case so we can help you determine the best path forward.

Why are there protections for whistleblowers?

Federal and state lawmakers want people with knowledge of illegal activity that defrauds the government or harms investors to come forward and report it. Law enforcement agencies, such as the U.S. Department of Justice, and regulatory agencies such as the Securities and Exchange Commission (SEC) rely on tips and disclosures from ordinary people to build cases against offenders.

To encourage people to report illegal activity, certain federal and state laws allow whistleblowers to receive a share of the money the government recovers. Those who are the first to report fraud, waste or abuse can receive 10% to 30% of the recovered funds.

The exact amount a whistleblower receives will depend on the unique circumstances of the case. Your whistleblower lawyer will help you understand how much you may collect on the claim and how to advocate for your share.

Motley Rice whistleblower lawyers have represented numerous individuals in a broad range of whistleblower lawsuits and agency actions. In all cases, we work with potential whistleblowers to protect their rights and help them file accurate and thorough claims with the applicable court or agency.

Contact our whistleblower lawyers today to discuss your potential case.