What’s Whistleblowing and Qui Tam?
Good to Know…
A “whistleblower” is a person with knowledge of deceptive conduct against the U.S. government, or fraudulent activity at a public company – one that files financial documents with the U.S. Securities and Exchange Commission.
Qui tam (kwee tam) is a Latin term for a lawsuit brought by a private citizen (popularly called a “whistle blower” (or “relator” in a lawsuit), on behalf of the Government against a person or company who is believed to have violated the law (law.com).
Whistleblowers have the right to file a qui tam lawsuit on behalf of the federal Government.
Why Take the Risk?
First and foremost – It is the right thing to do. If you don’t stand up, who will? Our taxpayer-supported programs should be free from fraud and abuse by others. When someone submits false claims against a government program, there should be a consequence.
Second – The government recognizes the important role whistleblowers play in protecting government programs. People who witness fraud against taxpayers are in the best position to bring it to the attention of the government. Since the Civil War, whistleblowers have been rewarded for their courage in reporting fraud.
Whistleblower Incentive – In a successful whistleblower case, the responsible organization can be ordered to repay the Government up to three times the amount by which the Government was defrauded. Whistleblowers may be entitled to up to 30 percent of the amount awarded to the Government.
You also may be entitled to Whistleblower protection – legal restitution (additional monetary award) and possible reinstatement to your former position, or a higher one, if you were a victim of retaliation for whistleblowing.
Retaliation against those who report fraud and abuse is prohibited. The law protects you against employer retaliation and discrimination of any kind. If it occurs, you may be entitled to additional damages, as well as reinstatement to your previous role or a higher position. Whistleblower lawsuits usually are filed anonymously and may not therefore be viewed by the accused or the public-at-large.
Whistleblower claims can be filed by anyone with personal knowledge of wrongdoing. Importantly, a whistleblower must actually witness or become personally aware of misconduct. Information regarding the alleged fraud must also be original — not otherwise known to the Government.
False Claims Act (FCA), (31 U.S.C. §§ 3729–3733). The FCA is one of the federal Government’s main tools to fight fraud against US taxpayers and is one of the oldest whistleblower laws in the nation. Since its passage in the Civil War era, 29 states and the District of Columbia have passed similar laws to protect taxpayers and government programs at the state level. The FCA includes a qui tam provision that allows individuals, or “relators,” to “step into the shoes” of the government and file legal actions against wrongdoers to recover monies obtained by fraud. In many cases, the government decides to intervene in the case. This intervention means that the government takes over the litigation from the Relator. Relators still receive compensation in this event, even though the Government does most of the work. Relators may be awarded up to 30 percent of recovered damages in a successful whistleblower law suit. Between 1987 and 2013, the government was able to recover nearly $40 billion from FCA suits, largely from qui tam cases brought by relators.
This means that you, and every American – every tax payer, accountant, office worker, laborer, farmer, teacher, executive, student, assistant and retiree – can report fraud without repercussion. In addition to the Department of Justice, federal and state health care programs, other institutions such as the Securities Exchange Commission, the Internal Revenue Service, and the Commodities Future Trading Commission support Whistleblowing-incentive programs.
FCA violations can occur in any industry that enters into a government contract. Often, FCA cases involve fraud against the Internal Revenue Service, the Department of Defense, the Social Security Administration, the Veteran’s Administration, Federal and State Health care programs, including Medicare and Medicaid, and federal student loans programs.
In addition, in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act took effect, providing increased incentives for whistleblowers who witness violations of the federal securities law to report them to the Securities and Exchange Commission (SEC). Such violations may include market or stock price manipulation, insider trading, Ponzi schemes, and other types of wrongdoing that affect our Nations’ securities markets.
For additional information about fighting fraud: [Featured Fraud Stories]