Types of Whistleblowing Cases

Whistleblower submissions can be sorted into two broad groups: 

• Lawsuits under the “qui tam” provision of the False Claims Act (FCA), which relate to fraud against the government.
• 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), which relate to the laws those agencies enforce, including laws protecting investors.

If you observe fraudulent or illegal activity, you may be able to file a lawsuit or report to the government under one of these programs. The reporting method will depend on the nature of the illegal activity, which law the activity violates, and who the activity harmed.

Qui tam whistleblower cases

The most common types of whistleblower cases are called “qui tam” cases, which are filed under a federal law called the False Claims Act (FCA) or similar state laws. The FCA broadly prohibits companies and individuals from claiming money from government agencies through fraudulent conduct or statements that are false or misleading. 

Qui tam is a Latin phrase. Loosely translated, it means “who also” or “me too,” a reference to the fact that the party who brings the lawsuit (the plaintiff, but in this situation called the “relator”) sues both on their own behalf and also on behalf of the government that was defrauded. Qui tam lawsuits enable private citizen whistleblowers who discover fraudulent or illegal conduct that harmed the government to bring a lawsuit on behalf of the government, serving as a sort of “private Attorney General” to help recover the government’s money. 

Most qui tam suits are brought in federal court, alleging conduct that defrauds the United States or one of its agencies. But, about half the states also have similar statutes that allow private citizen whistleblowers to sue on behalf of state and local agencies. 

Private citizen whistleblowers suing under the False Claims Act have helped federal and state government agencies recoup tens of billions of dollars in money taken from taxpayers through fraud.

Learn more about filing a qui tam lawsuit.

Common types of qui tam cases

The most common type of False Claims Act qui tam cases involve some form of healthcare fraud. Healthcare fraud occurs when a doctor, a hospital, a medical practice, a pharmaceutical manufacturer, a pharmacy chain, or some other participant in the healthcare system engages in conduct that defrauds government-run health insurance programs such as Medicare, Medicaid, TRICARE, or the VA. A few examples include: 

• Overcharging government programs for services provided
• Charging the government for services that weren’t provided or that aren’t necessary
• Knowingly failing to return overpayments received from the government
• Engaging in kickback schemes that drive up government costs

Other common qui tam cases involve procurement fraud. These are allegations that a government contractor (any individual or company from which the government purchases goods or services) cheated the government by charging for:

• Shoddy or defective products
• Goods or services not actually provided
• Goods or services the government was fraudulently induced to acquire 

Qui tam cases may also seek to recover benefits, or a government grant or loan (such as a pandemic loan) obtained by falsely certifying eligibility. Allegations that a recipient of government money falsely certified compliance with regulations relating to data protection are another increasingly common basis for FCA cases.

These are just a few examples of qui tam fraud cases. The law is intended to recover government funds obtained through any false, fraudulent, or illegal practice. Put simply, deceiving the government to obtain money is wrong, and qui tam whistleblowers can help make things right.

Qui tam eligibility

Many successful qui tam whistleblowers are company insiders, such as employees or former employees who witnessed fraud firsthand. However, almost anyone with knowledge of fraud against the government may be eligible, so long as they did not participate in the fraud. 

These could include contractors, customers, competitors, victims, friends, family members, acquaintances, government employees, and even “home detectives” and data analysts who uncover fraud through research and data mining. Successful qui tam relators provide detailed evidence to government agencies, which then investigate the claims.

Qui tam financial incentives

If the lawsuit succeeds in proving fraud against the government, the recoveries can be substantial. The government is typically entitled to collect three times the amount of its damages, plus thousands of dollars in penalties for each false claim. 

If the government recovers funds as a result of the lawsuit, the relator (whistleblower) may receive 10% to 30% of the total recovery. Eligibility depends on various factors, including the quality of the evidence and the government’s involvement in the case. Additionally, qui tam relators may be entitled to attorneys’ fees and other recoveries. Even if the fraud didn’t directly affect them, whistleblowers who provide crucial evidence can receive a reward.

Is a lawyer required for a qui tam case?

Yes, whistleblowers are required by law to be represented by an attorney to pursue an action under the FCA. These types of lawsuits use specific procedures, and the legal and evidentiary requirements for successfully pursuing a False Claims Act suit can be complex and demanding. 

Moreover, many qui tam whistleblowers, especially those who are insiders, can unfortunately face retaliation or other blowback in response to their whistleblowing. Although the statutes provide robust protection against such retaliation, it is important to consult with an attorney to help protect your rights.

Motley Rice has knowledge and experience in all types of qui tam False Claims Act litigation and experience protecting whistleblowers from retaliation.

The other broad category of whistleblower cases is called agency whistleblower submissions. Several federal and state law enforcement agencies have programs designed to incentivize private citizens to come forward with any information suggesting an individual or company may have violated laws the agency is tasked with enforcing. 

Law enforcement agencies rely on these whistleblowers to help them hold bad actors accountable. Whistleblowers can do this by providing evidence or tips that the agencies might not have discovered on their own. Agency whistleblower submissions have helped law enforcement agencies recoup billions of dollars in fines and penalties.

Agency whistleblowing processes

Whistleblower submissions are typically submitted using a Tip, Complaint, and Referral (TCR) form. Each federal agency has its own rules and its own version of the TCR form, which asks the whistleblower to describe the evidence in their possession and explain how it suggests a legal violation. An attorney can help the whistleblower navigate these sometimes-complex procedures. 

Generally, whistleblower submissions that are most helpful to law enforcement agencies are those offering information that is:

• Original (e.g., first-hand knowledge to which the agency would not otherwise have access)
• Specific (e.g., detailed information including dates, names, locations, specific transactions rather than vague suspicions)
• Credible (e.g., truthful, internally consistent, clear basis for knowledge)
• Timely (e.g., relating to recent or ongoing conduct rather than actions that took place years ago)
• Impactful (e.g., affects significant numbers of investors or the market as a whole)

Once the whistleblower submits the TCR, the agency will review it and then decide whether to open a formal investigation or take other enforcement action. In doing so, the agency may interview the whistleblower or request additional evidence or assistance from the whistleblower as it assesses the quality of the information provided.

Eligibility for agency whistleblower submissions

As with qui tam whistleblowers, the most successful agency whistleblowers have historically been company insiders. Insiders may be employees (or former employees) of companies who observed fraud or illegal conduct firsthand and are able to provide law enforcement agencies with detailed accounts of what they saw happen. 

But being an insider is not a requirement for being an agency whistleblower, and many successful agency whistleblowers come from outside the targeted company. Again, this can include contractors, customers, competitors, and victims of the company or individual committing the fraud, as well as friends, family, and acquaintances of the perpetrator, government employees, and ordinary witnesses and “home detectives.” Even individuals or companies that discover fraud through mining data and connecting dots adding up to fraud can become agency whistleblowers.

Financial incentives for agency whistleblower submissions

If the TCR spurs an enforcement action that in turn leads to a successful outcome, the whistleblower may be able to obtain an incentive award for having helped the agency do its work. This award can be between 10% and 30% of the agency’s recovery of fines or penalties, depending on a number of factors. A whistleblower may be entitled to this share of the government’s recovery even if the fraud did not affect him or her directly.

Whistleblowers aren’t required to be represented by an attorney before submitting a TCR, unless they wish to submit their TCR anonymously. However, it’s always a good idea to seek legal advice before submitting a tip. Agencies receive hundreds, or even thousands, of whistleblower tips each year. Legal assistance can increase the helpfulness of the tip and the likelihood of it being successful.

Many federal and state agencies offer whistleblower programs that reward individuals for reporting illegal activity. If you have information about misconduct, consulting an attorney can help determine whether you qualify for a whistleblower program. 

Motley Rice has experience handling agency whistleblower cases and protecting whistleblowers from retaliation.

SEC whistleblower submissions

The Securities and Exchange Commission (SEC) enforces federal securities laws and protects investors by regulating stock exchanges and capital markets, investment and brokerage firms, and public companies. Under federal laws and regulations, SEC whistleblowers can receive substantial incentive awards for successfully reporting activity that defrauds securities investors or that goes against the best interests of the securities markets and their participants.

The SEC Whistleblower Program allows individuals to report any type of conduct that violates securities laws, including:

• False or misleading statements in offering documents
• Fraud by brokers, dealers or investment advisers
• Insider trading and market manipulation
• Ponzi or pyramid schemes
• Corporate bribery and self-dealing

SEC whistleblowers may receive 10% to 30% of recovered funds if their tip leads to an enforcement action with fines or penalties over $1 million.

Learn more about SEC whistleblower submissions.

CFTC whistleblower submissions

The Commodity Futures Trading Commission (CFTC) regulates markets and exchanges for commodities, futures, derivatives, options, foreign currency, and cryptocurrency, and protects investors in these products through enforcement actions. Under federal laws and regulations, CFTC whistleblowers can receive substantial incentive awards for successfully reporting activity that defrauds investors or that goes against the best interests of the commodities and derivatives markets and their participants. 

The CFTC Whistleblower Program allows individuals to report any type of conduct that violates commodities laws, including:

• False or misleading statements in offering documents
• Fraud and deceptive or misleading practices by commodities issuers, brokers, dealers or investment advisors
• Insider trading and illicit use of nonpublic information
• Market manipulation
• Ponzi or pyramid schemes

CFTC whistleblowers may receive 10% to 30% of recovered funds if their tip leads to an enforcement action with fines or penalties over $1 million.

DOJ whistleblower submissions

The U.S. Department of Justice (DOJ) investigates and prosecutes federal crimes, including corporate fraud, corruption and financial misconduct.

In 2024, DOJ’s Criminal Division launched a Corporate Whistleblower Awards Pilot Program to uncover and prosecute corporate crime. Under this pilot program, a whistleblower who provides the Criminal Division with original and truthful information about corporate misconduct that results in the successful forfeiture of assets may be eligible for an award. To be eligible, the whistleblower’s information must relate to one of the following areas:

• Certain financial crimes involving banks and cryptocurrency businesses
• Foreign and domestic corporate corruption
• Healthcare fraud involving private insurance

Whistleblowers may receive a percentage of forfeited assets if their tip leads to a successful prosecution that includes criminal or civil forfeiture.

IRS whistleblower submissions

The Internal Revenue Service (IRS) enforces U.S. tax laws and investigates tax fraud and noncompliance. IRS whistleblowers are individuals who report tax fraud or tax non-compliance to the IRS and whose information is successfully used by the IRS in an enforcement or collection action. These types of noncompliance could include any violation of federal tax laws and regulations, such as:

• Corporate fraud and tax evasion
• Money laundering
• Illicit use of offshore tax havens

Whistleblowers may receive 15% to 30% of recovered funds if their tip leads to successful enforcement and collection. Awards are issued only after all taxpayer appeals are exhausted.

Both qui tam and agency whistleblowers can face retaliation for whistleblowing activity, especially if they are company insiders. Retaliation can include:

• A decrease in scheduled work hours
• Demotions
• Denial of overtime hours or pay
• Reduction in pay
• Termination

False Claims Act cases are filed confidentially and remain under seal while the government investigates but will eventually become unsealed and made public once the government completes its investigation. Agency whistleblower submissions are kept confidential and can be filed anonymously, but sometimes companies under investigation are nevertheless able to piece together who reported them.

Although the law provides robust protection against such retaliation, including the opportunity to bring a lawsuit against the retaliating company or individual, it’s important to consult an attorney to help protect the whistleblower’s rights. 

If an employer is found to have illegally retaliated against or attempted to silence a whistleblower, it can be required to pay for damages, including:

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

If you report unethical or illegal activity to an agency and believe your employer retaliated against you, speak with a whistleblower lawyer as soon as possible. They can review your case and help you decide whether filing a lawsuit is in your best interests.

Motley Rice’s whistleblower attorneys have represented hundreds of individuals who strive to hold companies and individuals accountable for their unethical and illegal activity. 

Our attorneys have experience representing a variety of whistleblowers. We’ve represented individuals who have blown the whistle on organizations such as:

• Banks and other financial services companies
• Securities and commodities issuers and broker-dealers
• Healthcare providers
• Major pharmaceutical companies
• Tobacco companies
• Defense contractors and other government contractors
• Companies that receive government grants, loans or financing

If you have information or evidence of fraudulent or illegal activity within an organization, talk with a whistleblower lawyer as soon as possible to discuss your options.

Contact a whistleblower attorney to learn more about your rights or discuss a possible claim. Fill out this form or call 1.800.768.4026.