During the 2014 fiscal year, the government’s whistleblower program has been the most successful yet. According to the New York Times, the Justice Department recovered $5.69 billion for false claims per the False Claims Act in 2014. The two biggest settlements included recovery for faulty mortgages and Medicare and Medicaid health care fraud.
Whistleblowers are recovering huge monetary rewards. Whistleblowers are entitled to as much as 30% of the money recovered in cases with a favorable outcome. Approximately 1400 whistleblowers have filed qui tam actions in last two years and received $435 million in rewards.
A majority of whistleblowers were former employees of companies that are knowingly committing fraud, and many of these former employees started the process by making complaints through their company’s internal processes before becoming full blown whistleblowers. Other whistleblowers include contractors and consultants who worked closely with these companies. While reporting financial fraud may sound risky, the Dodd-Frank Act protects whistleblowers from retaliation from their employers when they make a report. In response to the 2008 financial crisis, the government enacted the The Dodd-Frank Wall Street Reform and Consumer Protection Act, to crack down on fraudulent claims and investments.
The success of the government’s whistleblower program under the False Claims Act has spread the word to other agencies and industries on the value of whistleblowers. For example, the Securities and Exchange Commission (SEC) created their own program for whistleblowers and is currently offering more substantial rewards for information that alerts them to violations of federal securities laws. Opened in 2011, the Office of the Whistleblower is offering whistleblowers 10-30% of claims that bring in $1 million or more. Since the implementation of its new program, the SEC has also seen an increase in reports from whistleblowers and has awarded 14 whistleblowers. To date, the largest amount paid out was $30 million for information that revealed an ongoing fraud. Without input from the whistleblower, the fraud would have been almost impossible to uncover by the SEC.
The Internal Revenue Service (IRS) has followed suit and encourages whistleblowers to report individuals or companies that cheat on their taxes. In 2012, the IRS paid out $104 million to a whistleblower who revealed the secret behind Swiss bank accounts.
With rewards for whistleblowers in the millions, abuse of the system is inevitable. If one individual is making numerous claims, it alerts the government that they may be receiving false information. Therefore, it is wise to get advice from an experienced attorney on the merit of your claim before filing.
The Evans Law Firm, Inc. takes financial fraud cases, such as whistleblower and false claims (qui tam) lawsuits, whistleblower award claims, Securities and Exchange Commission and Internal Revenue Service (IRS) whistleblower cases, consumer class action fraud, banking fraud, and insurance fraud. You may contact the Evans Law Firm if you have been subject to financial fraud or if you believe you have a whistleblower claim for a free and confidential consultation. Please email us at email@example.com or call us at 415-441-8669.