When you decide to file a whistleblower claim against an employer, you may be putting your career on the line. This should not deter you, but it makes it essential to hire the right counsel to lead you through the process. An attorney well-versed in employment law can guide you, help you draft documents and protect your rights as a whistleblower.
Whistleblower lawsuits, also known as “Qui Tam” lawsuits, are a kind of legal action brought against companies for defrauding the government. A Qui Tam lawsuit can be filed under the False Claims Act, a law that rewards whistleblowers when the government is successful in recovering funds lost to fraudulent activity. Common whistleblower complaints deal with issues surrounding the following:
The Whistleblower Process
The whistleblower plaintiff is typically an employee of the company who comes forward with information or evidence that shows the company is defrauding the government.
In recent years the most common cases of fraud have been seen in the healthcare, finance and defense sectors, though fraud may occur in any industry where large government contracts are awarded. The legal process generally looks something like the following:
- Qui tam (whistleblower) lawsuits must be filed within six years of the alleged fraudulent activity
- A plaintiff with information leading to the recovery of funds must file the lawsuit, not any third party
- Lawsuits are filed confidentially and under seal, so the defendant will not immediately be aware a lawsuit has been filed.
- When the seal is lifted the defendant will usually have a chance to settle out of court.
An individual who comes forward and exposes this type of corporate fraud may be eligible to receive between 15 and 30 percent of the overall recovery of a successful Qui Tam lawsuit. The recovered amounts can be millions of dollars, and may amount to double or triple the amount the government was defrauded.
Qui Tam cases are a complex but powerful way for citizens and employees to help the government end several kinds of fraud, and recover lost taxpayer money. If you work for a company that is misappropriating government money, and have question on how to proceed, contact The Lyon Firm.
Joe Lyon is a highly-rated lawyer representing plaintiffs nationwide in a wide variety of workplace fraud claims. For more information about whistleblower lawsuits, or a free consultation, call today.
ABOUT THE LYON FIRM
Joseph Lyon has 17 years of experience representing individuals in complex litigation matters. He has represented individuals in every state against many of the largest companies in the world.
The Firm focuses on single-event civil cases and class actions involving corporate neglect & fraud, toxic exposure, product defects & recalls, medical malpractice, and invasion of privacy.
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What is the False Claims Act?
The False Claims Act rewards whistleblowers whose lawsuits recover government funds, and furthermore, provides job protection to whistleblowers because of the professional and personal risks involved in exposing fraud against the government. Whistleblower lawsuits are also known as Qui Tam lawsuits, and can be filed against companies for defrauding the government.
Under the False Claims Act a private citizen may sue an individual or a business for defrauding the government, and recover funds on the government’s behalf. This kind of lawsuit is filed confidentially to protect the whistleblower, and to give the Justice Department time to investigate the allegations.
Government investigations into Qui Tam cases can take years. After a whistleblower and their attorney file a claim with the Justice Department, the government investigates the allegations, and will decide whether it will intervene in the case to recover government money.
In a whistleblower settlement, you could receive as much as 30 percent of the funds recovered through your claim. Claimants usually have a better chance of success if the government joins the lawsuit.
Whistleblowers have the option to pursue these cases without government assistance, though the chances of success in the suit are much higher when the government joins the case. Most successful whistleblower cases are resolved through settlement negotiations. Common defendants in government fraud cases include:
- Medical device companies
- Nursing homes
- Individual physicians
- Defense Contractors
- Medical Laboratories
- Investment Banks
- Money Managers
- Pharmaceutical companies
- Healthcare affiliates
How Are Whistleblowers Lawsuits Settled?
The amount of the whistleblower reward depends on several factors, including the quality of the case as presented to the Justice Department. If the government chooses to intervene in the case and recovers funds through a settlement or a trial, the whistleblower plaintiff is entitled to 15 to 25 percent of the recovery amount. If the Justice Department elects not to participate and the plaintiff proceeds alone, the maximum award increases to 30 percent.
Because qui tam cases typically involve large government contracts in healthcare, finance or defense, the recovery amounts can be huge, and in turn the awards are quite large. In 2012, in just one case, the government was able to recover $3 billion dollars. The Justice Department recovered over $4.7 Billion from False Claims Act cases in 2016 alone.
This is the third highest annual recovery in False Claims Act history, with an annual average of $4 billion since 2009. Around $2.5 billion came from the health care industry. This is the seventh consecutive year that health care fraud recoveries have exceeded $2 billion.
The next largest recoveries came from the financial industry in the wake of the housing and mortgage fraud crisis. Many companies have taken advantage of government programs and contracts relating to health care, defense and national security, food safety and inspection, federally insured mortgages, highway funds, and agricultural subsidies.
The total recovery from whistleblowers during that period amounts to over $31 billion. As a result, whistleblower plaintiffs have been well-compensated. In 2016, plaintiffs in these types of cases were awarded over $500 million for information and evidence leading to the recovery of government and taxpayer money.
The rate of trying successful fraud cases has accelerated in recent years. Around 60 percent of whistleblower settlements in the last 30 years have come from cases in the last 8 years.
If the government prevails in recovering funds in a case, the whistleblower can receive up to 30 percent of the recovery amount. Whistleblowers filed hundreds of lawsuits in 2016, and the government awarded plaintiffs $519 million in a variety of cases.
- In September, 2012, the IRS awarded a plaintiff over $100 million for information regarding tax fraud at UBS, his former employer.
- In July, 2012, a whistleblower at the drug maker GlaxoSmithKline collected $94 million after exposing manufacturing faults.
- A plaintiff was awarded $84 million in 2012 for reporting that Abbott Laboratories was engaged in off-label promotions of its anti-seizure drug Depakote.
- Bank of America paid mortgage fraud fines to the government in 2012, and the individual who initiated the investigation was awarded$14.5 million.
- In September, 2009, ten Pfizer employees were awarded $102 million for having exposed the illegal promotion of the arthritis drug Bextra.
- In December, 2000, two plaintiffs shared a $100 million reward after they exposed HCA for regularly overbilling Medicare.
- In January, 2004, plaintiffs shared an award of over $8 million after revealing physicians at a California hospital were performing unnecessary cardiac procedures.
Government Fraud Lawsuits
Government Fraud lawsuits often involve healthcare (Medicare and Medicaid), financial security, technology and defense contractors working for different military bodies. Fraud claims also involve contractors winning large infrastructure projects, and institutions that receive large amounts of federal research funding under false pretenses.
Coming forward with information as a whistleblower and filing a lawsuit takes courage. But since the action of coming out against an employer has serious risks, and employees may be putting their career on the line to expose fraud, plaintiffs are covered under the False Claims Act and may be awarded in successful cases.
A whistleblower plaintiff can expect to receive between 15 and 30 percent of the overall recovery of a successful fraud lawsuit. In some cases this can amount to millions of dollars. Ohio whistleblower lawsuits filed against government contractors may involve the following kinds of fraud:
- Illegal kickbacks
- Government regulatory violations
- Falsifying data for funding
- Instances of gross overbilling
- Products not manufactured in accordance with specifications
- Making false statements to win a contract
- Providing products that fail to comply with environmental standards
- Overstating the labor cost for a project
- Destroying records or receipts
Whistleblower Tips & Rewards
The SEC established the Office of the Whistleblower in 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The two largest awards have involved three individuals totaling $83 million, and to two individuals totaling almost $54 million.
The Office of the Whistleblower received 5,282 whistleblower tips in 2018, about 18 percent more than in 2017. Whistleblowers who provide information that helps the SEC collect a minimum or $1 million in fines can potentially receive between 10 and 30 percent of the fine.
The reward percentage for each plaintiffs depends on several factors, and it is prudent to hire a whistleblower protection attorney to maximize the payout from the agency, as well as protect oneself from company retaliation. Payouts generally depend on the significance of the information received as well as the level of cooperation by the individual whistleblower.
Contractor Fraud Lawsuits
- In September, 2017, Pacific Architects & Engineers, Inc. (PAE), settled a whistleblower case for $5 million after allegedly not following proper vetting procedures for its personnel that performed and billed work to the U.S. State Department. An investigation found the company was aware of the requirements and did not comply. The whistleblower, a former PAE manager, received $875,000 for the help in recovering these funds.
- In August, 2017, Huntington Ingalls Industries (HII), a shipbuilder contracted to perform work for the U.S. Navy and Coast Guard, settled with the government to pay $9.2 million in charges after years of allegations of misconduct and charges that it violated the False Claims Act for instances of gross overbilling. The case was helped in large part by a whistleblower, a former HII employee.
- In March, 2017, CA Technologies, a technology-management software company, settled a whistleblower case for $45 million after allegedly making false statements in order to win a government contract, and failed to fully disclose its discounting practices. CA did not provide government customers discounts while they discounted their commercial customers for the same products and services. In 2013, CA paid out an additional $11 million for fraudulently billing public agencies on software contract renewals.
- Duke University and two individual researchers face 2017 claims that they defrauded the government on research grants from the National Institute of Health (NIH). The plaintiff, a former Duke employee, claims the university falsified data to win hundreds of millions of dollars in research grants. Several other research institutions could be at risk when whistleblowers come forward to expose similar instances of fraud.
Types of Whistleblower Settlements
For many employees and whistleblowers, coming forward and filing a qui tam lawsuit takes courage, and has its own risks involved in the process. Employees may put their entire career on the line to expose fraud. As a result, under the False Claims Act, plaintiffs are awarded in successful whistleblower lawsuits.
Recovered funds for government agencies usually involve the following kinds of fraud:
- Off-label marketing
- FDA regulation violations
- Medicare fraud
- Financial fraud claims
- Products not manufactured in accordance with contract specifications
- Charging for new parts and selling used parts
- Making false statements to win a contract
- Providing products that fail to comply with environmental standards
- Overstating the labor cost for a project
- Destroying contract records
- Tax Fraud—unreported income, unauthorized tax deductions and other tactics
- Real Estate Fraud—illegal property acquisition
- Insurance Fraud—filing duplicate or undocumented insurance claims for Medicare or Medicaid reimbursements
- Overbilling healthcare services
Once a person has evidence of fraud against the government and decides to take action, they are advised to find an experienced lawyer to assist in the complex process. The work done by your lawyer will be essential to the success of the case and will be a major factor in determining whether you will receive a reward, and the amount of the reward.
An award for exposing fraud is alluring; however, it is important to consider the implications of coming forward against your employer. Whistleblowers often pay a price for doing what they think is the right and ethical thing to do.
Employees who expose their company may be fired, demoted and discriminated against at work for speaking out. Such retaliation by your employer is illegal. If you experience this kind of behavior, a Whistleblower attorney can help by filing a discrimination or wrongful termination lawsuit.
There are several risks involved with coming forward against your employer and filing a whistleblower complaint. Employers have been known to retaliate against whistleblowers, which is illegal, though no less common. Hiring a Qui Tam attorney may be important in not only obtaining a large reward, but also in protecting you from retaliation.
Exposing fraud not only recovers taxpayers money and punishes a deceptive company, but it can result in a large settlement and reward for a plaintiff. It is important to know the widespread implications of coming forward, however, and to contact a whistleblower protection attorney to discuss.
Whistleblowers must have the courage to do the right and ethical thing and come forward. Employees may face retaliation, but that is illegal, and a whistleblower protection attorney can assist you in the challenging days after coming forward.
Whistleblower Rewards & Settlements
Employees with sensitive information should protect themselves and should not wait too long to discuss legal action and whistleblower lawsuits with an attorney. It may be natural for some individuals to be reluctant to come forward, but it benefits plaintiffs to build a case as soon as possible. Statutes of limitations may also dictate when a case can be filed.
Whistleblower Lawsuits FAQ
It is wise to consult with an attorney before you file a complaint against a defendant in a Qui Tam lawsuit. A whistleblower lawyer can assist plaintiffs in filing the relevant materials in a timely manner, work to obtain the most possible compensation, and protect plaintiffs against employer retaliation.
Whistleblowers able to provide information to the government that ends in recovering lost funds can expect to be rewarded from between 15 and 30 percent of the recovered amount. The reward will depend on the type of information provided, and other legal factors.
After filing a complaint against an employer or individual, highlighting fraudulent activity, the next step is to fight for rightful compensation, and protect yourself against employer retaliation. A whistleblower attorney can help make sure this does not happen.
A qui tam action is a lawsuit confidentially filed under seal in federal district court in accordance with Ohio and Federal Civil Procedure. A copy of the whistleblower complaint, with a written disclosure statement of all material evidence and information must be filed, in camera and under seal. The complaint and its contents is kept confidential until the seal is lifted. The complaint is not served on the defendant.
The False Claims Act allows persons and employees with evidence of fraud against federal programs or contracts to sue the wrongdoer or employer on behalf of the United States government.
In whistleblower lawsuits, the government may intervene and join the legal action. If the government declines, the private plaintiff may proceed with an attorney.