Is 2014 The Year of the Whistleblower?

 In Law Planet

Gavel and BooksIt is a good year for whistleblowers!  According to the Department of Justice (DOJ), whistleblowers in qui tam lawsuits have pulled in more than $300 million since October 1, 2013. It is easy to use this date because the federal government starts its fiscal year on October 1st. So with an impressive five more months to go qui tam whistleblowers have already made a lot of money this year!

There were two giant settlements with two enormous companies.  The first was with drug giant, Johnson &Johnson. This settlement came down in November 2013, and more than $167 million was split between three whistleblowers. 

The second major case this year was against banking conglomerate JPMorgan Chase. The government settled this claim in February 2014. There was only one relator who was entitled to an award of $63.9 million.

It seems like every year whistleblowers make more and more on qui tam lawsuits. In the year 2000, 11 qui tam relators were awarded more than one half of $1 billion. This year, as we sit on $345 million we could be setting a new record! The false claims act is an absolutely wonderful tool for the government to collect back fraudulently obtained funds.

Since the False Claims Act was amended in 1986, qui tam relators have been awarded more than $4 billion. 

The big area continues to be healthcare fraud. It makes up a majority of the rewards we see published.  It appears that federal prosecutors are most interested in fighting against Medicare and Medicaid fraud. But that does not mean procurement fraud is dead. Certainly prosecutors are willing to investigate clear abuses by defense contractors, road construction crews, miss-application of educational funding and other various forms of fraud against government contracts.

What is the Federal False Claims Act?

There is an amazing federal law commonly called The False Claims Act. This Act permits citizens or companies to step into the shoes of and act on behalf of the federal government by filing lawsuits to recover money which was improperly paid because false information had been provided. The brave person who takes this action is called a relator.  After the lawsuit is filed the government’s prosecutor can examine the case and is allowed to intervene in the lawsuit. If the prosecutor takes over the lawsuit then they must handle it from that point forward in any way they feel is in the best interest of the government. 

If the government intervenes then the relator may receive anywhere from a floor of 15 percent and up to a ceiling of 25 percent of the amount recovered by the government. 

If the government declines to intervene and the relator continues the lawsuit on behalf of the government against the offending party, the relator is supposed to be paid between 25 and 30 percent. 

One of our favorite things about the qui tam law is that it was created by President Abraham Lincoln to stop fraud against the union during the Civil War. It was used from 1863 until after Lincoln’s death, in which it fell out of favor. 

In 1986 the qui tam laws were amended so that relators would be given greater incentives to bring about the whistleblower claim. It also increased the punishments to include three times the damages against the offending company.

There is no doubt that the amendments in this law and the growth in this field have helped the federal government fight fraud in a dramatic way since 1986. This process continues to grow today!

If you find you have a whistleblower or qui tam case, contact an experienced attorney today to help you bring your case to justice.

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