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In recent years hundreds of millions of dollars have been awarded to whistleblowers. There are various state and federal statutes that enable whistleblowers to either obtain a portion of an award they recover for the government and in turn receive a whistleblower award for themselves.
Federally the primary statutes that govern whistleblowing are the False Claims Act (FCA), Sarbanes Oxley (Sox) also known as an SEC whistleblower statute and the IRS. There are also various other whistleblower protections though statutes like osha which are very limited and other federal acts which deal more with individual protections rather than massive recoupments.
Attorney general Jeff sessions indicated in his recent 2018 comments that is believed up to 10% of Medicare billing is Medicare fraud. That costs taxpayers a billion dollars a year. Thanks to the false claims act whistleblowers are economically incentivized to blow the whistle since under the FCA they can receive a whistleblower award up to 30% of the government recovery. So that’s 250 million dollars a year for people who have the courage to come forth and expose economic fraud against the government.
Fraud against the government may occur in various different ways such as billing for services not rendered, falsely coding a Medicare bill, playing with the rules about credentialing or a host of other frauds including Medicaid fraud as well. In addition, certain states like California and Illinois have mechanisms in place to recover if private insurance companies are being defrauded. Sticking with the false claims act though other big topics are defense contractor fraud illegal kickbacks stark act violations and violations of the foreign corrupt practices act which also deals with bribes.
The SEC whistleblower provisions have been robustly enforced lately and the cardinal rule is determine whether the financial entity has the best interest of the client in mind. Violations can include inside trading, self-dealing, using segregated funds inappropriately and a smattering of other knee it when you see it violations. SEC whistleblowers are unique because with the use of an attorney the sec whistleblower can stay anonymous from start to finish. In contrast FCA whistleblowers require the use of counsel and can’t be anonymous although certain techniques are used to try to do so such as creating a corporation for purposes of blowing the whistle.
IRS whistleblowing needs to be extremely detailed and have large amounts of money at stake. The IRS likes to see a case with many millions dollars of fraud with The whole case spelled out for them. In contrast certain states like New York have active tax whistleblower statutes that enable blowing the whistle on a lesser scale.
All in all whistleblowing is a courageous but difficult process. You should seek the advice of a whistleblower law firm to see if your information is actionable and to go over the right way to blow the whistle.
Thanks to our friends and contributors from JTB Law Group for their insight into whistleblower laws.