False Claims Act Claims

The federal False Claims Act and the Virginia Fraud against Taxpayers Act both encourage individuals with knowledge of fraud against the government to come forward by authorizing them to file an action in the name of the government. The False Claims Act provides a significant monetary recovery to private persons who bring qui tam actions. This recovery may be between 15 – 30% of the amount the government recovers. These cases often involve the following types of fraud:

• Medicare and Medicaid Fraud where a company engages in fraudulent billing (including charging for unnecessary services, duplicate billing, wrongly using the wrong billing codes, unbundling, and inflating costs), and falsifying information relating to grants and research.
• Contractor Fraud where a contractor uses illegal means, such as kickbacks or bribes, to win government contracts, or who use false information to win government contracts.
• Defense Contractor Fraud where faulty equipment, weapons and weapon systems are supplied to the armed forces.
• Violation of GSA Contracts where contractors have failed to comply with “best pricing” requirements for government contracts, price reduction requirements, and the Trade Agreements Act.
• Environmental Fraud where contractors fail to comply with or report misconduct in connection with, environmental statutes and regulations.

Securities Whistleblower Claims

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer  Protection Act (“Dodd-Frank Act”) as part of a comprehensive overhaul of the country’s financial regulatory system. The Dodd-Frank Act creates an incentive program that rewards and protects any person who wants to blow the whistle on individuals or companies who violate the securities laws and the Foreign Corrupt Practices Act (“FCPA”). The Dodd-Frank Act also created a whistleblower program for the Commodities Futures Trading Commission (“CFTC”), which rewards whistleblowers for information regarding violations in the trading of commodities and on the currencies exchanges. Whistleblowers who provide information that the  Securities and Exchange Commission (“SEC”) uses in furtherance of an enforcement action can recover a reward of between 10% – 30% of the total amount of money collected by the SEC

Tax Related Whistleblower Claims

The Tax Relief and Health Care Act of 2006 created a whistleblower rewards program for individuals informing the IRS of tax fraud and other misconduct. The law provides monetary rewards in cases where the potential amount owed to the IRS by businesses, in combination for back taxes, penalties, interest and additions to tax, exceeds $2 million. If the tax cheat is an individual, that person’s gross income for the applicable year must also exceed $200,000.

The rewards under the Act are substantial. Tax whistleblowers can receive a minimum reward of 15% and a maximum reward of 30%. If, however, the IRS determines that the whistleblower’s information was not the original source of information but still contributes to the additional collection, the reward is capped at 10%. However, if there are two whistleblowers who disclose the same tax underpayment, the whistleblower who made the original disclosure will receive the award. The fact that an individual participated in the fraudulent activities does not preclude a reward. Instead, the whistleblower’s involvement may be used by the IRS as a basis to reduce the reward.

Protection from Retaliation

A number of laws prohibit an employer from harassing or retaliating against an employee for attempting to uncover or report fraud against the government. If retaliation does occur, the whistleblower may be awarded back pay, litigation costs, and attorney fees.

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