Whistleblowers May Earn a Cash Reward for Reporting Fraud
The U.S. False Claims Act, as well as the False Claims Acts in many states, has a whistleblower cash reward provision to encourage insiders to report fraud against the government. Over the past several years total False Claims Act rewards paid to whistleblowers total in the hundreds of millions of dollars.
Our experience at MahanyLaw is that whistleblowers are motivated primarily to stop fraudulent conduct by their employer or another company; however, for people willing to stand up and do the right thing, a substantial cash reward can make up for the trouble and potential career risk these heroes undertake.
For employees fired or harassed for reporting their employer’s fraud, the False Claims Act (Federal and State) all have anti-retaliation provisions that provide for further awards for those whistleblowers.
False Claims Act Whistleblower Cash Awards are based on Company Fraud Penalties
The federal False Claims Act calls for money penalties against companies that cheat the government by making false claims. Examples might include Medicare Fraud where a healthcare provider charges for services not performed or Government Contract Fraud where a contractor bills for substandard materials.
The penalties vary but typically the company violating the False Claims Act must pay three times the amount fraudulently received (“treble damages”) and the Department of Justice or other office can impose a further penalty of $5,000 to $11,000 per violation. As there can be hundreds, thousands, or even tens of thousands of violations at one company over multiple years, the False Claims Act damages and penalties can be immense.
Whistleblower awards under the Qui Tam provisions of the federal and state False Claims Act are based on a percentage of the total amount recovered.
Rewards and Awards to Whistleblowers are Based on Total Damages
Whistleblower reports resulted in 10’s of billions of dollars of fraudulently obtained money returned to the government in the last few years and whistleblowers earned in the hundreds of millions. The False Claims Act qui tam provision provides for cash rewards of up to 25% of the total settlement amount if the Department of Justice accepts and prosecutes the case.
In situations where the government does not take on the case and the whistleblower pursues a whistleblower lawsuit to recover the money on their own, the False Claims Act provides for awards of up to 30% of the amount recovered plus attorneys’ fees.
Many factors go into determining the ultimate amount of an award including quality of information reported and how substantially it proves a False Claims Act violation. It is important to plan your strategy with an experienced False Claims Act lawyer prior to reporting fraud to earn the largest possible reward.
Whistleblower Awards in the False Claims Act Require Non-Public Information
To earn a whistleblower award under a state or federal False Claims Act your information, which includes any evidence you may have gathered, must be non-public, i.e. it can’t be something you read about in the paper or similar source. A legitimate whistleblower reward claimant is typically an insider of some sort. This includes employees, ex-employees, vendors, contractors, consultants or the like.
You MUST Do THIS First to Claim a Whistleblower Reward or You will Miss Out
Many people who report fraud miss out on a reward because they simply call The Department of Justice, a state Attorney General or other government office to report fraud. This is a good way to report fraudulent conduct but in order to be eligible for a whistleblower reward under a state or federal False Claims Act you must do something first.
Whistleblower awards are earned by working with your lawyer to prepare and file a whistleblower lawsuit “on behalf of the People of the United States” to recover the money lost to a company’s fraud. This process must be followed in order to be eligible to earn a whistleblower reward. An experienced MahanyLaw whistleblower attorney will explain how this process works but the primary message is – do not call a government office to report fraud UNTIL you have spoken with your lawyer.
MahanyLaw Proven Process Maximizes Whistleblower Claims
In fact, our process helped whistleblowers develop the largest single defendant settlement in history last year. There are strict time limits to file and the first to report fraud has a huge advantage in whistleblower claims cases.