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False Claims Act Whistleblowers Can Reap Substantial Rewards

Have you become aware of fraud in a federal government contract or program? If you are considering blowing the whistle, you might qualify for a reward. In successful cases, whistleblowers who file under the False Claims Act are eligible for between 15% and 30% of any money recovered on behalf of the government.

That can be a substantial amount. If the fraud is proven, the defendant can be held liable for three times the actual damages the government sustained. Additionally, the defendant is generally required to pay an additional $5,000 to $10,000 for each fraudulent claim it made against the government.

One common scenario for a False Claims Act suit is that an employee of a government contractor becomes aware of a false or inflated bill sent to the federal government or one of its agencies. Another is that someone realizes that their employer is overbilling a government program, such as Medicare or Medicaid.

The person who learns of the fraud, usually working with an attorney, notifies the U.S. Department of Justice and provides it with whatever information they have. They also file what is called a "qui tam" action under the False Claims Act.

As the case progresses, the Department of Justice may choose to take over. If it does, the whistleblower's percentage of the recovery drops to between 15% and 25%; if there is no intervention, whistleblowers can receive between 25% and 30%. However, a Department of Justice intervention makes it more likely there will be a large recovery.

How much about the fraud do I need to know?

The more information you have, the better. However, if the fraud has not been made public, you only need to know that it is taking place. If there has been public disclosure of the fraud, the rules change. At that point, you need first-hand knowledge of the fraud, independent from any public revelations.

Public disclosures include to the media, in a civil or criminal case, or in a report or hearing of the Government Accounting Office. If you don't know whether the fraud has been publicly disclosed, talk to a lawyer familiar with False Claims Act whistleblowing.

Can my employer retaliate against me for blowing the whistle?

Not legally, although it does happen. The False Claims Act specifically shields whistleblowers from retaliation by their employer. This could include being fired, demoted, harassed, threatened or subjected to any negative job consequence because you investigated, filed or participated in a False Claims Act qui tam case.

If you can show your employer retaliated after you blew the whistle, you can sue for double the amount you lost as a result, such as lost wages and other damages.

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