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Whistleblower

Before you blow the whistle, know your rights.

The federal False Claims Act and comparable state laws contain “whistleblower” provisions which allow private citizens to bring suit on behalf of the government to recover monies stolen from the government. As a reward for their efforts, whistleblowers generally are entitled to receive a portion of the funds recovered.

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What is the False Claims Act? The federal False Claims Act imposes liability on persons and companies who defraud the government or governmental programs. The law was enacted in 1863 to stop rampant profiteering during the Civil War, and it continues to serve an important purpose today. Under the False Claims Act, those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds are liable for three times the amount of the fraud plus civil penalties of between $5,500 and $11,000 for each false claim submitted. The states have enacted similar laws imposing liability for fraud against state governments and governmental programs.

What are whistleblower provisions? The federal False Claims Act and comparable state laws contain whistleblower, or “qui tam,” provisions which allow private citizens to bring suit on behalf of the government to recover monies stolen from the government. As a reward for their efforts, whistleblowers (known as “relators”) generally are entitled to receive a portion of the funds recovered. The whistleblower usually receives between 15% and 25% of the total amount recovered, which in most cases is three times the amount of the actual fraud plus civil penalties as outlined above.

What’s different about whistleblower actions? The procedure in False Claims Act cases is different than in normal civil actions. The complaint is initially filed under seal and served only on the government (i.e., the alleged perpetrator of the fraud is not made aware of the complaint at this stage). This gives the Department of Justice a chance to investigate the allegations and decide whether it wants to intervene to help pursue the stolen funds. The law calls for the seal to remain in place for 60 days, but many times the government seeks and obtains extensions of time to complete its investigation. Even if the government decides to intervene in a given case, the whistleblower (or relator) may choose to pursue the case on his or her own. While government intervention generally strengthens a qui tam case, many a whistleblower has gone on to win his or her case and receive a hefty financial award after the government has declined to intervene.

Whistleblower laws have a very wide-ranging application to any misuse of any federal or state government monies. The federal and state false claims acts apply in a wide array of situations involving a company’s misuse of government funds or efforts to mislead government agencies in order to obtain such funds. Typically, the subjects of false claims act litigation are health care institutions and companies that do government contract work, but any entity that submits false claims to the government may be liable. Claims have been brought for overbilling of Medicare and Medicaid, fraud in military and defense contracting, false environmental certifications, and other false claims and certifications in connection with government spending programs.

What are typical examples of the misuse of government monies? Here are some hypothetical examples of false claims act violations committed by employers:

  • A government contractor falsely bills the government for services not rendered.
  • A government contractor falsely certifies that it is in compliance with various prerequisites for obtaining a government contract.
  • A health care provider bills Medicare for services that were not performed or were unnecessary.

Are employees that report unlawful activity protected? The law contains protections for employees who are considering blowing the whistle on their employer. It is unlawful for employers to punish their employees for pursuing rights under the False Claims Act, and employees may recover for any such retaliation. Nonetheless, blowing the whistle raises sensitive issues for any employee or former employee. Our whistleblower attorneys are available to provide counseling, as well as representation in negotiations and any litigation that may ensue with regard to false claims act issues.

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Blitman and King whistleblower attorneys provide cutting edge, practical advice for clients in the Albany, Manhattan, Long Island, Rochester, and Syracuse NY areas.