An effective tool to combat fraud against the government is a qui tam lawsuit, also known as a whistleblower lawsuit.  Under the False Claims Act (“FCA”), private individuals, or whistleblowers, can file civil lawsuits against individuals or entities claiming fraud on or false claims submitted to the government.  If successful, these whistleblowers can share in a portion of the recovery.  However, many people with inside information about illegal misconduct may remain silent for fear of whistleblower retaliation.  Such fears are unwarranted as the FCA and other laws provide whistleblower protection

Whistleblower Protection; Anti-Retaliation Laws

There are over 30 federal laws that protect whistleblowers from employer retaliation, such as the Sarbanes Oxley Act.  The Sarbanes Oxley Act was a whistleblower protection law passed in the wake of the Enron scandal to provide whistleblower protection to “any officer, employee, contractor, subcontractor, or agent” who submitted a good faith report of corporate wrongdoing, including securities fraud, bank fraud or violations of SEC or other federal regulations.  The Sarbanes Oxley Act prohibits a corporation/employer, its agents, and related third parties from retaliating against the whistleblower.  If the employer does retaliate and fires the whistleblower unfairly as a result, the whistleblower can separately sue the employer for reinstatement, back pay with interest and legal fees.

Whistleblower Protection; False Claims Act

The FCA provides further whistleblower protections as well as incentives for reporting fraud on the government.  Under the qui tam provisions of the FCA, the government shall recover three times the amount of money lost due to the fraud, along with a penalty of between $5,500 and $11,000 for each false claim by the defendant.  Whistleblowers receive between 15% and 30% of the total recovery, providing a financial incentive for whistleblowers to take the risks involved in stepping forward to report illegal acts by an employer. 

On May 28, 2009, President Barack Obama enacted the Fraud Enforcement and Recovery Act (“FERA”), designed to enhance the FCA and strengthen whistleblower protections.  FERA adds anti-fraud funding, expands the reach of the FCA, and extends whistleblower protection to contractors, subcontractors and agents who report fraud, fixing the loophole in the FCA that allowed companies to escape FCA liability by using subcontractors. 

Whistleblower Protection; Whistleblower Attorneys

For more information about whistleblower lawsuits and whistleblower protections, contact our whistleblower attorneys today to discuss your legal options.

Published November 17, 2011 by