A whistleblower (also written as whistle-blower or whistle blower)[1] is a person who exposes any kind of information or activity that is deemed illegal, unethical, or incorrect within an organization that is either private or public.[2] The information of alleged wrongdoing can be classified in many ways: violation of company policy/rules, law, regulation, or threat to public interest/national security, as well as fraud and corruption. In the legal world, a whistleblower lawsuit is called a “Qui-Tam” lawsuit and a whistleblower is called a “Relator.”

–> Role in the Fraud Scheme
     —-> Mastermind Self – Reporting

The person or persons who created or were instrumental in creating or carrying out a scheme to defraud. These persons can self-report; however, they are rarely awarded a whistleblower or relator reward.
     —-> Victim of Fraud Scheme

The person, persons, or industry that is being adversely affected by the alleged fraud.
     —-> Witness to Fraud Scheme

The person or persons who may not be directly affected by the alleged fraud, but witnessed the fraudulent actions firsthand.
     —-> Unwilling Participant in Fraud Scheme

The person or persons who are involuntarily involved in the alleged fraud.
     —-> Duty to Report

The duty to report misconduct is the ethical responsibility to report abuse and misconduct.

–> Do I Need Evidence?
     —-> “Sworn Statement  – No Evidence”

A sworn declaration (also called a sworn statement or a statement under penalty of perjury) is a document that recites facts pertinent to a legal proceeding. It is very similar to an affidavit, but unlike an affidavit, it is not witnessed and sealed by an official such as a notary public.
     —-> “Third Party Consent to Record”

Federal law allows recording of phone calls and other electronic communications with the consent of at least one party to the call. YOU count as a party to the call so if you consent to the recording, federal law allows it. A majority of the states and territories adopted wiretapping statutes based on the federal law, although most also extended the law to cover in-person conversations. Thirty-eight states and the District of Columbia permit individuals to record conversations to which they are a party without informing the other parties that they are doing so. These laws are referred to as “one-party consent” statutes, and as long as you are a party to the conversation, it is legal for you to record it. (Nevada also has a one-party consent statute, but the state Supreme Court interpreted it as an all-party rule.) Twelve states require, under most circumstances, the consent of all parties to a conversation. Those jurisdictions are California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington. Be aware that you will sometimes hear these referred to inaccurately as “two-party consent” laws. If there are more than two people involved in the conversation, all must consent to the taping.
     —-> “Company Property”
     —-> “Confidentiality or Exit Agreements”

A lot of companies will have you sign a confidentiality or exit agreement when an employee’s time at said job ends. This basically states that both parties reached an amicable end to the particular working relationship. These types of agreements are not required by law, but many companies use these to seal information and protect themselves from future lawsuits. If you signed such an agreement, you may still be able to be a whistleblower and receive a whistleblower reward.

—> “Firsthand Knowledge” or Original Source

Firsthand knowledge refers to something which the witness actually saw or heard, as distinguished from something they learned from some other person or source. It is also knowledge gained through firsthand observation or experience, as distinguished from a belief based on what someone else said. It is important to note that to qualify for the relator reward, a whistleblower should have firsthand knowledge of the fraud. For example,  being told about or reading about suspicious billing practices at your company gives rise only to indirect knowledge, not the “direct and independent knowledge” required by the FCA for someone to qualify as an original source. Unless you were directly involved in or witnessed the precise activity at issue, you may not be an original source.

Whistleblower Relator Rewards: Because whistleblowers can face backlash from employers, coworkers, and others in their industry for revealing false claims and fraud against the government, the U.S. government found that financial rewards are crucial to encouraging whistleblowers to come forward with information, despite the personal risks involved. The U.S. government dramatically increased its recovery from corporate fraud by incentivizing citizens with a whistleblower relator reward. A whistleblower relator reward is a financial incentive used by the government to encourage citizens to speak up and expose fraud committed against governmental programs. These rewards are in the form of a percentage of the monetary damages that are recovered by the government from the wrongdoers (settlement). Individuals who file a suit on behalf of the government under the Qui Tam provision of the False Claims Act can be awarded 15 to 30 percent of the damages that the government is able to recover.

For example, in a Pharmaceutical Qui Tam Lawsuit that settled in 2012 for $762 million ($612 million civil settlement), the relator reward was over $92 million USD.

If you participated in the fraud, you can still report it. Your participation in the fraudulent activity will not automatically preclude you from filing a Qui Tam complaint or receiving a relator reward. This is especially true if you participated in the fraud unknowingly or under duress from a manager or fear of losing your job. However, if you planned or initiated the fraud, you will likely be barred from submitting a claim, disqualified after the fact, or you may be limited significantly in the relator reward you receive.

OSHA’s whistleblower statutes protect you from being fired after internally blowing the whistle on workplace fraud. However, your employer may look for another reason to terminate you. There are steps you can take to reinstate your position if you are terminated, but you should be prepared for the chance that your professional life may suffer as a result of you blowing the whistle.

–> Whistleblower Protection

OSHA’s whistleblower statutes protect you from retaliation. An employer cannot retaliate by taking “adverse action” against workers who report injuries, safety concerns, or other protected activity, including workplace fraud. In addition to the relator rewards which incentivize whistleblowers to come forward with information, despite the personal risks involved, the U.S. has strong laws protecting a tipster’s identity and actionable penalties against those who retaliate or interfere with reporting.

–> Retaliation can go both ways

It is important to note that while you may be understandably disgruntled with your employer, you should not discuss your concerns with anyone other than your attorney or a whistleblower advocacy organization such as FEA. Discussing the potentially fraudulent activity that you may have seen or heard at your workplace can hurt your case because it may constitute as a public disclosure (see “public disclosure” below) of the fraud, or as disparaging your employer.

As a rule of thumb, you should not discuss the fraudulent activity or the steps you are taking to report it, to anyone other than your attorney or a whistleblower advocate who is working with you and your attorney. There are two solid reasons why:

1. You may break the “seal” which may result in you NOT receiving your share of the settlement (relator’s reward.)
2. You  may cause a public disclosure which will prevent your case from proceeding and will also result in you NOT receiving the relator’s reward.

–>  Seal (what is it and can I break it?) Qui tam complaints are filed in federal courts and are sealed for 60 days. Typically, every 60 days the seal will be extended to allow the government time to investigate your claim(s). When a case is sealed, neither you or anyone involved can discuss the case with anyone but the government. This means you cannot disclose or discuss the case with friends, family, coworkers and technically not even your spouse. If you or any involved parties break the seal, the court can place sanctions onto you or them. If you as the relator or whistleblower are found to be in breach of the seal, your settlement could be drastically reduced or eliminated altogether.
–> Public disclosure

It is important that you do not contact the media or anyone else in regards to the fraudulent activity that you witnessed at anytime during the process. Doing so may result in a public disclosure which the federal government established that if the information publicly disclosed is enough to “put the government on notice of a possible false claim,” and “substantially the same” as those allegations in your filed complaint, your case may be barred from proceeding.  The FCA’s public disclosure bar prevents a relator from filing a qui tam complaint based on information previously disclosed to the public, thereby dissuading parasitic lawsuits based on publicly available information.

Yes. You can report tips anonymously which can lead to the alleged fraud being exposed. However, you cannot be awarded any sort of relator reward when you report anonymously.  Since Qui Tam lawsuits are filed under seal, your identity as a whistleblower will remain confidential during the government’s investigation of the fraud or misconduct. Typically, the whistleblower’s identity is not revealed until either the case is successfully settled or dismissed.

–> Condition of Payment v. Condition of Participation

Recently, several courts dismissed Qui Tam cases on the basis that the allegations involved government contract conditions of participation, rather than conditions of payment.  The rationale behind this is that a claim for payment is only “false” for purposes of the False Claims Act when the alleged misconduct involves compliance with statutes or regulations that are a condition of governmental payment of that claim.  When the alleged misconduct involves compliance with statutes or regulations that are conditions of participation in a federal health care program, there is no false claim for payment that can be regulated by the False Claims Act.

–> Off-Label v. False and Misleading-

Off-label is the use of medication or other products for an unapproved indication. For example, the drug Wellbutrin that is meant to be prescribed as antidepressant, is also sometimes used to help with smoking cessation and appetite control. This type of off-label use is generally used with good intention, however it also opens up the possibility of lawsuits being filed based on the claims that the drug in question is being prescribed for unapproved uses. However, in recent years, the courts handed the U.S. Department of Justice (DOJ) and the U.S. Food and Drug Administration (FDA) a string of defeats in cases involving government efforts to prosecute companies and individuals for off-label promotion.  In United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), the Second Circuit held that the Federal Food, Drug and Cosmetic Act (FDCA) neither prohibits nor criminalizes truthful, non-misleading speech that may constitute off-label promotion of prescription drugs approved by the FDA. Although the court ruled that the First Amendment protects truthful and non-misleading off-label drug promotion, the First Amendment does not protect false or misleading commercial speech. Therefore, for the time being, FCA cases based on allegations of false and misleading off-label drug promotion are of particular interest to the DOJ.

How long will it take?

There are a lot of factors involved in a government Qui Tam investigation, and while the government made investigating fraud claims a top priority, resources are still an issue. On the upside, there have been many fraud-related cases filed in recent years, but unfortunately, there aren’t enough Department of Justice attorneys, or investigators to investigate all of the cases simultaneously. This means that the government has to make decisions about which cases present the strongest evidence and have the greatest potential of return on investment of the government’s limited resources. Further, False Claims Act cases tend to be large and complicated with millions of evidence documents to review; this means that there is much to investigate and often this process takes  longer than the whistleblower hopes or expects.

Give us a call and we will be happy to discuss your unique case and provide you with examples of similar cases and their investigative timeline!

–>  Qui Tam

• In common law, a writ of Qui Tam is a writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “[he] who sues in this matter for the king as well as for himself.”

–> Relator

• You! This is the private person who is reporting fraudulent activity. AKA: Whistleblower

–> First to File

• Only the whistleblower who reports an alleged fraud first will receive a monetary award as a result of providing information. This is why if you know of fraud, you should contact us now to begin the process of reporting it to the government. This will increase the likelihood of you being first to file.
  –>  Rule 9(b)

• Under Rule 9(b) of the Federal Rules of Civil Procedure, allegations of fraud or mistake must be pleaded with particularity.  All appeals courts to have address the issue of whether Rule 9(b) pleading standards apply to qui tam actions have held that the heightened standard applies.  The Fifth Circuit, the Sixth Circuit, the Seventh Circuit, the Eighth Circuit, the Tenth Circuit, and the Eleventh Circuit have all found that plaintiffs must allege specific false claims.

–> Contingency

• More commonly referred to as the “contingency fee,” this fee structure ensures that your attorney will only be compensated if you receive a relator reward. The fee is typically in the range of 40% of the relator reward.  Be aware that there are non-attorney organizations that offer to “partner” or assist whistleblowers in exchange for a portion of their relator reward. This can result in your net reward being drastically reduced. FEA does not cost you anything at all. You will never pay more with our assistance and support than you would have without us. We are whistleblowers just like you and we are here to offer our experience at no cost to you!

–> Intervene

• Government Intervention Rights Broadly Interpreted. A False Claims Act case can be brought by a whistleblower (relator) to recover funds on behalf of the federal government. The government then has the option to “intervene” and proceed with the action.
  –>  Sanctions
• Sanctions or the rewarded settlement/action
  –> Actionable
• Giving sufficient reason to take legal action.
  –> AUSA
• The Association of the United States Army is a private, non-profit organization that acts primarily as an advocacy group for the United States Army. Founded in 1950, it has 119 chapters worldwide.

–> Statute of Limitations

• A statute of limitations is a law which sets out the maximum time that parties have to initiate legal proceedings from the date of an alleged offense. The precise form of a statute of limitations differs from one jurisdiction to the next.
  –> Credibility

The quality of being trusted and believed in, or the quality of being convincing or believable.