In recent years, hundreds of millions of dollars have been awarded to whistleblowers across the country. Both federal and state laws provide powerful incentives and protections for individuals who report fraud, particularly when that fraud impacts government programs. These laws allow whistleblowers to obtain a portion of the funds recovered by the government—commonly referred to as a whistleblower award.

If you have knowledge of fraud against the government or a financial institution, it’s essential to understand the various types of whistleblower cases and how to proceed. At The Law Offices of Mark T. Hurt, our experienced whistleblower lawyers in Virginia and Tennessee are ready to evaluate your case and help you determine the best course of action.

Types of Whistleblower Cases

Federal Whistleblower Statutes

Several powerful federal laws allow individuals to blow the whistle on fraud and wrongdoing. The most prominent include:

False Claims Act (FCA)

The False Claims Act (FCA) is the primary federal statute governing whistleblower actions involving fraud against the government. This law empowers private citizens to file lawsuits on behalf of the government—called “qui tam” actions—against individuals or companies committing fraud.

Common examples of FCA violations include:

• Billing Medicare or Medicaid for services not rendered
• Falsifying diagnosis codes or billing for medically unnecessary procedures
• Credentialing fraud and kickback schemes
• Stark Law violations and improper physician referrals
• Defense contractor fraud
• Violations of the Foreign Corrupt Practices Act (FCPA) involving government contracts

Whistleblowers under the FCA may receive 15% to 30% of the government’s recovery. In 2018, Attorney General Jeff Sessions estimated that up to 10% of Medicare billing involves fraud, costing taxpayers over $1 billion per year. Under the FCA, whistleblowers could collectively receive up to $250 million annually for helping expose this fraud.

SEC Whistleblower Program

The Securities and Exchange Commission (SEC) oversees a whistleblower program targeting financial fraud and violations of securities laws. SEC whistleblowers are eligible for awards ranging from 10% to 30% of monetary sanctions collected in successful enforcement actions.

Examples of SEC whistleblower claims include:

• Insider trading
• Self-dealing and misappropriation of client funds
• Failing to act in clients’ best interests
• Misuse of segregated accounts
• Misrepresenting financial data to investors

One unique feature of the SEC program is that whistleblowers can remain anonymous throughout the entire process—as long as they are represented by an attorney.

In contrast, False Claims Act whistleblowers must use legal counsel and cannot remain anonymous, although some techniques (like creating a whistleblower LLC) may help maintain privacy during early stages.

IRS Whistleblower Program

The IRS Whistleblower Office offers financial rewards to individuals who report large-scale tax fraud. These cases often involve significant amounts of money—typically in the millions—and require well-documented evidence of wrongdoing.

Types of IRS whistleblower cases may involve:

• Corporate underreporting of income
• Tax shelters and improper deductions
• Hidden offshore accounts
• Intentional underpayment of payroll or self-employment taxes

Successful whistleblowers can receive up to 30% of taxes, penalties, and interest recovered by the IRS.

Unlike federal SEC claims, IRS whistleblower cases must present highly detailed reports with substantiated financial data. Certain states, such as New York, also have tax whistleblower laws that allow for state-level claims involving smaller amounts of fraud.

State-Level Whistleblower Statutes

In addition to federal laws, several states have adopted their own versions of the False Claims Act. For example:

• California and Illinois have whistleblower statutes that allow for lawsuits involving private insurance fraud.
• New York’s False Claims Act allows whistleblowers to report state tax fraud and receive a percentage of any recovered funds.

These state-level programs vary in scope and eligibility but may provide additional legal pathways to pursue justice and obtain financial rewards.

Limited Whistleblower Protections Under Other Statutes

Certain federal laws offer whistleblower protections without necessarily offering financial incentives. Examples include:

• OSHA Whistleblower Protections
• Consumer Product Safety Improvement Act (CPSIA)
• Sarbanes-Oxley (SOX) – separate from the SEC award program

These laws are primarily designed to shield whistleblowers from retaliation (e.g., wrongful termination, demotion, or harassment) rather than encourage large financial recoveries.

Fraud Against the Government: How It Happens

Whistleblower claims can arise in a wide range of industries. Some of the most common schemes include:

• Billing Medicare or Medicaid for services not performed
• “Upcoding” procedures to increase reimbursement
• Using unlicensed or improperly credentialed personnel
• Submitting false grant applications
• Defense contractor overcharges or delivery of substandard goods

If you’ve witnessed or have evidence of this kind of activity, you may be eligible to file a whistleblower claim.

Should You Talk to a Whistleblower Lawyer?

Yes. Whistleblowing is a serious legal process that can have major financial and professional consequences—both good and bad. Before you report anything, it’s important to consult with an experienced whistleblower law firm that understands how to build a compelling case and protect your identity and rights.

Contact The Law Offices of Mark T. Hurt Today

If you have information about fraud against the government, tax evasion, or securities violations, contact our whistleblower attorneys for a confidential case evaluation. We will:

• Review your evidence and determine whether you have a viable claim
• Explain your rights under the FCA, SEC, IRS, and state whistleblower laws
• Handle your case discreetly and aggressively pursue maximum compensation

Call us at (276) 623-0808 or fill out our online contact form to get started.

We represent whistleblowers throughout Virginia, Tennessee, and nationwide.