Did we just say 7 ways to lose a whistleblower case? We sure did! Many law firms publish helpful tips for whistleblowers… we are no different. Please see our 11 Step Guide for Whistleblowers.
There are lots of “how to” posts out there. In this article we reveal the 7 biggest mistakes made by whistleblowers. Hopefully we can prevent others from making the same errors. There is nothing worse than finding out that all your hard work and bravery for standing up against fraud and greed was for nothing.
If you are aware of misconduct by your employer that causes financial harm to the government, you may be entitled to a cash reward. There are other programs run by the IRS, SEC, Federal Highway Administration and the Justice Department that also pay cash rewards.
Before we tell you what not to do, lets quickly recap some examples of misconduct that can lead to a reward:
- Defense contractor overbilling or supplying defective products (False Claims Act “FCA”)
- Doctor overbilling Medicare (FCA)
- Pediatric dentist billing Medicaid for unnecessary dental procedures (FCA)
- Highway contractor using foreign steel in bridge project (Buy America Act)
- Mortgage company writing shoddy residential loans (FCA)
- Business falsely using Veteran Owned business designation (FCA)
- Hospital paying kickbacks to doctors (FCA, Anti-Kickback Statute)
- Physician Assistants billing Medicare at physician rates (FCA)
- Company underreporting taxes (IRS)
- Importer avoiding tariffs by mislabeling country of origin (FCA)
- Foreign bank hiding accounts of Americans (IRS)
- Brokerage firm violating anti-money laundering rules (SEC)
- Bank violating banking laws (FIRREA)
- Mining company bribes foreign government official (FCPA, SEC)
The Biggest Whistleblower Mistakes
Waiting too Long
At the first moment you believe you may be entitled to a whistleblower reward, call us. All the whistleblower programs have a first to file rule. Only the first to report a particular type of misconduct gets a reward. That means if you wait too long, all of your hard earned work is benefitting someone else, the person who filed first.
One of the biggest reasons to act quickly is that whistleblower cases are typically sealed. Because the government likes to investigate these cases in secret, there is no way of telling whether someone has already filed. No public data base, no public court records.
And if you are seeing the results of your information on TV or reading about it, chances are that it is too late to file and claim a reward. (At least once a month we have to deliver that bad news… there are many people who don’t step forward until after the wrongdoer is shutdown or fined.)
We are happy to help you make an informed decision on whether or not you should blow the whistle. You won’t get any pressure from us, just good advice.
Calling a hotline
There are two types of hotlines, government hotlines and employer hotlines. Calling either one won’t get you a reward and may just get you fired. We will discuss each separately.
Many companies have a company hotline or ethics line. Some hotlines even claim to be staffed by outside professionals. You may have seen one of these hotline numbers on a poster in the breakroom.
Typically, if you see wrongdoing, these hotlines promise to take action. They are usually answered by an HR representative or sometimes an outside consultant.
While the concept is good, many whistleblowers tell us nothing happens when they call the hotline. Worse, often companies use the hotline to ferret out “troublemakers.” Instead of the company taking action against the wrongdoer, they find a way to get rid of the whistleblower. You may find yourself demoted, hours cut, transferred or even fired.
Once you are gone, the company can continue with business as usual.
Most whistleblowers that we meet try to fix problems internally before finding a lawyer or going to the government. Only when they are ignored or suffer retaliation do they seek us out. Unfortunately, if they have already been fired or alerted the company, investigating the case becomes far more difficult.
We aren’t saying that you should never speak with your boss or use a company hotline. We simply suggest you speak with us first so we can gather evidence and better advise you in case you suffer retaliation.
The other hotlines are those run by the government. Despite the best intentions, calling a government hotline usually doesn’t work. They will also never pay you a reward.
Once a week we hear from a whistleblower who claims that she blew the whistle, cooperated with authorities and now just heard the company or wrongdoer was fined millions of dollars. They come to us so that we can help them get their reward.
We can’t help. There is no reward. Calling a government hotline, writing a letter to Congress or calling the FBI does not entitle you to a reward. (See more in section 3 below.)
Not only isn’t there any reward available to those who call hotlines, the chances of your information being investigated is much lower.
May of the government hotlines get thousands of calls and forms per year. Make that tens of thousands. It is hard for an overworked intake operator to know which cases are legitimate and which are being filed by disgruntled workers / spouses / competitors / customers.
The bottom line is that most hotline cases don’t get investigated. There aren’t enough resources. Contrast that to a case formally filed in court or with the agency by an experienced whistleblower lawyer. These cases get investigated. The chances of getting a reward are much higher when you have experienced counsel.
For example, at Mahany Law we have the former chief of enforcement for the Office of the Comptroller of the Currency, the former chief of investigations for the SEC and two experienced former prosecutors. We know how to package cases to make sure they get thoroughly investigated. (Federal False Claims Act cases are required to be filed by a lawyer.)
Should you call a government company or government hotline? Probably not but talk to us first before calling a hotline or your boss.
Reporting without following the precise procedures set forth in the False Claims Act, SEC Whistleblower Program, IRS Whistleblower Program or other whistleblower laws
The whistleblower reward programs have very specific legal requirements. For example, federal False Claims Act cases must be filed under seal in federal court by a licensed attorney. IRS and SEC have forms that need to be filled out. A FIRREA whistleblower case needs a sealed declaration filed with the Justice Department in a particular manner.
Once again, we are always saddened when a whistleblower otherwise eligible for a reward gets turned down because he didn’t “dot the ‘I’s or cross all the ‘t’s.’”
If you aren’t interested in a reward and don’t want any risk of your identity being disclosed, then by all means file on your own. Remember, however, our caveat above that the bulk of whistleblower cases are declined. If you want to make a difference, make sure you file a formal claim and follow the rules.
One of the rules in most jurisdictions is having specific examples. We can sometimes get around that rule but it is extremely tough to do so. That is why Rule 4 – Keeping a Written Journal – is so important . and next on our list of biggest whistleblower mistakes.
By calling us before you tell your boss (and possibly get fired) helps us investigate and get the examples we need.
Remember, there is only one way to receive a reward; you must follow the formal filing procedures of the various whistleblower programs from which you are seeking a reward. If you don’t file those rules, you don’t get a reward.
Not keeping a record
From the moment you suspect wrongdoing, begin keeping a journal and collecting examples. And don’t use a company device to store that record. Ditto for keeping your journal in the desk drawer of your office. (If you are fired, chances are great that you won’t have the ability to go back and collect your journal or other evidence.
Many employers scare employees by threatening them with theft charges or prosecution for violating the Trade Secrets Act. We take those threats seriously. Once again, by calling us early in the process, we can better advise you what you can take and what you can’t.
Many whistleblower cases involve Medicare, VA Tricare and Medicaid fraud. Employers will train you that you can’t take healthcare records of patients and that if you do, you can be prosecuted for violating HIPAA. That is only half true.
While you can get in trouble for taking or disclosing healthcare records, there are exceptions if those records are to be used in a whistleblower complaint and provided to the government under seal. Once again, speak to us as early as possible in the process.
Once you leave your employment– voluntarily or involuntarily – getting evidence becomes much more difficult.
Not only is a journal useful to gather evidence, memories fade over time. Federal procedural rules require whistleblower complaints be pled with “particularity.” That means we need the who, when, where and how. You may know that your boss engaged in blatant wrongdoing but without examples and details, your complaint may get tossed.
Here is one more thing to think about. Pharmaceutical companies, defense contractors and many other businesses have sophisticated IT departments. They have programs that look for an employee printing large quantities of data or sending data to a home email address. We see several people a year get caught because of the above or using a work computer or phone to contact their lawyer or the government.
Again, speak to us first. We can not only tell you what you may legally take, we can also give you hints as to how to avoid getting fired.
Breaking the seal (telling other people)
One of the hardest things about being a whistleblower is not being able to share that fact with anyone. For some, being a whistleblower is lonely.
As noted above, the government wants to investigate whistleblower cases secretly. They don’t want wrongdoers destroying evidence or knowing that the authorities are watching. That is why so many of the whistleblower laws have a seal requirement.
Seal means “secret” and under many whistleblower programs, disclosing even the existence of the whistleblower claim is against the law. Break the seal and you can get punished.
Does this mean you can’t tell your spouse? That is probably okay but no one else.
As we all learned when we were kids, there is no such thing as a secret. If you tell your best friend at work, and even if she swears that your secret is safe, chances are that she will sooner or later tell her best friend. Ultimately the boss and the company know.
You have not only broken the law; you have given the company a heads up so they can destroy evidence or make up a story to explain their actions.
Even if the case hasn’t been filed yet, sharing your plans with others gives the wrongdoers the opportunity to hide evidence and hide their tracks. If the disclosure was made before filing, there is no seal violation but you just gave prosecutors a reason to decline your case. (Depending on the program, the government declines anywhere between 80% and 99% of claims, don’t give them an excuse to decline yours!)
A couple paragraphs ago we said that breaking the seal is against the law. While we have never seen a judge jail someone for contempt because of breaking the seal, we have seen huge fines levied and sometimes the cancellation of the reward.
Here is another scenario… you confide in your best friend at work that you believe something your company did is against the law. That coworker may not have known about the fraudulent activity before you told them, but now they can file a whistleblower reward claim. If they do that first, they get the reward.
The bottom line is don’t discuss your whistleblower case with anyone except your lawyer. Obviously, if contacted by prosecutors or agents you can also discuss matters with them. If that happens, we will be there at those meetings.
Picking the wrong attorney
Finding the right lawyer is the single most important thing you can do. It is often the difference between no reward and a million-dollar check. Although number 6 in this blog post, it is the number one on the list of biggest whistleblower mistakes.
There are only a handful of lawyers who concentrate in whistleblowing cases. Many employment and personal injury lawyers “dabble” and hope for the big score. If they don’t handle whistleblower cases on a daily basis and don’t have a track record, find someone who does.
There are many bright, wonderful lawyers out there. Unfortunately, whistleblowing law is not only complex, it changes daily. Unless you do this daily, it’s hard to keep up.
Whistleblowing cases are also challenging because they involve two areas law. Your lawyer must not only know about whistleblower laws but also whatever the underlying case is about. For example, if your lawyer is filing a Medicare fraud case, she must know both whistleblowing law and complex Medicare regulations.
Don’t be afraid to ask lots of questions. It is often not enough to simply ask if they have handled a whistleblower case under the False Claims Act. Ask about their experience in your particular type case. For example, an employment lawyer whose only whistleblower case involved Medicare fraud probably isn’t a good fit for a whistleblowing case involving mortgage underwriting or cybersecurity regulations.
Many attorneys typically think of whistleblower cases as their lottery ticket to a huge fee. Unfortunately, it may be the only whistleblower case they see in their entire career. You don’t want them learning on your case.
There is even a bigger reason why experience counts. In recent years, the Justice Department is turning down cases only to have the whistleblower’s own lawyer prosecute. Does your lawyer have the experience, industry contacts and money necessary to take on a big corporation?
We often get called by these firms or their clients. They found their “lottery ticket” and signed up a false claims act whistleblower case. They file a mediocre complaint and then drop the case like a hot potato when the government declines to prosecute. By then the damage is done, the government’s investigation is over and it is often too late at that point.
Unfortunately, if you have an inexperienced attorney, chances are that they will simply walk away if the government declines.
It’s one thing for the government to investigate and determine there is no case. But what happens if the government declines because prosecutors are simply too busy. Is your personal injury or employment lawyer ready for the fight of his or her life and in an unfamilar area of law?
Finally, an experienced whistleblower lawyer usually knows the agents and prosecutors involved in investigating your case. (We have the added benefit of having former agents and prosecutors on our staff who know exactly how to package a case.)
We know which prosecutors are best for the case and where the case law is most favorable. Inexperienced lawyers typically file in the local courthouse because New York or Los Angeles is too far or filing there would be more expensive and involve hiring local counsel. We file where it is best for the client, not where it is cheapest for us or most convenient.
If your Medicare fraud whistleblower case involves a doctor’s office in Dubuque, Iowa, there is only one place where the case can be filed. But what if the whistleblower case involves a big mortgage company? Chances are that case can be filed anywhere in the country and the best place to file it may be 2000 miles away. At Mahany Law we enjoy nationwide relationships and know the best places to file.
We also take the time to speak with prosecutors before filing and learn who has successfully handled similar cases and won’t sell out for a quick settlement.
Remember, your choice of a lawyer has a huge influence in whether you will see a large reward or nothing at all. [Helpful Hint: While membership in a bar association is not evidence that a lawyer is well qualified, most good lawyers are members of TAF, (Taxpayers Against Fraud), the whistleblower bar association. Ask if your lawyer is a member.]
Earlier we spoke about what documents or evidence you can take and what you can’t. That certainly is one aspect of safety. We want to keep our whistleblowers out of trouble.
There is another aspect of safety. Retaliation.
The federal False Claims Act, most of the 29 state whistleblower acts and the other big whistleblower reward programs have robust anti-retaliation provisions. We work hard to protect you from termination, demotion and the like. We are happy to work with your employment lawyer or help you find one.
A good whistleblower lawyer cares about the client and not just the money.
[Under most programs, whistleblowers suffering retaliation are entitled to double damages including future lost income as well as attorney’s fees. Fighting retaliation means waiting for the courts. Sometimes we can negotiate a quick resolution involving paid leave and a buyout.
Many lawyers only care about the reward. Make sure you understand what your lawyer will and won’t do and if not satisfied, negotiate the terms or find someone who is also concerned about your safety.
Deciding to become a whistleblower is no easy task. We have the years of experience to help you make an informed decision. We also understand the process and will be there with you every step of the way. We urge you to call us at the first sign that you may have a whistleblower claim.
We don’t charge for consultations and won’t be upset if what you call us about turns out to be nothing. We would rather you call.
For more information, contact us online, by email or by phone at 202-800-9791. All inquiries are kept confidential. We accept cases worldwide.