For those of us that pay close attention to the news, it seems as though fraud is rampant in our country. There has been a steady stream of stories relating to corruption in the healthcare and financial industries, ranging from the recent $1 billion Medicare bust in Miami to the collective $36 billion a year in financial fraud that affects retirees.
Fraud ranges from individuals who seek to deprive people of their savings to institutional criminal activity that steals taxpayers’ money for profit. In order to combat fraud against the government, rewards are offered to those who come forward with information of wrongdoing that they have witnessed.
It makes sense that there are rewards offered as incentive for whistleblowers. While many of those who witness fraud happening in their own places of work would probably like to blow the whistle based on principle alone, it is only appropriate that there be a real, tangible reward for those who will eventually save taxpayers millions (in some cases billions) of dollars due to fraud.
These types of whistleblower cases happen more often than you might realize, and there are plenty of examples of people who have reported fraud who received a substantial reward for their efforts.
How Whistleblowing Works
The process depends on the type of whistleblower claim being filed. For example, in cases of workplace safety violations, whistleblowers often end up reporting employers to the Occupational Safety and Health Administration. In cases of illegal activity in the financial sector, whistleblowers often end up working with the Securities and Exchange Commission.
For those that witness fraud against the government, there are laws that provide an avenue for potential whistleblowers to come forward, providing a person with protection and rewards for their information. Often, but not always, it is an employee of the company committing the fraud who blows the whistle. The reason that employees so often play the role of whistleblower is that they are the ones who are most familiar with the workings of the company committing the fraud and are able to provide information that the government then uses to uncover that fraud.
Once an employee, or any whistleblower, has enough evidence to clearly demonstrate that fraud has occurred, they will approach the courts with their evidence, which will then eventually make its way to the Justice Department, who will determine whether or not they will intervene. This is a crucial stage of the process, as government intervention greatly increases the chances of a case’s success.
This is all done through what is known as the False Claims Act, a law designed to encourage citizens to file lawsuits on behalf of the government. There are attorneys who specialize in filing claims through the False Claims Act and the process of whistleblowing. An experienced attorney is key to the process, as they can help guide a whistleblower through the system and help them gather and organize information that will be effective in getting the attention of the Justice Department.
Examples of Rewards for Whistleblowers
In 2012, a banker blew the whistle on his employer, UBS, helping the government recover money his superiors had been hiding in Swiss bank accounts for their clients. The man received $104 million as a reward.
Also in 2012, a woman received $94 million for notifying the government of fraud committed by GlaxoSmithKline. In this case, the company settled and admitted to no wrongdoing.
In 2009, a whistleblower was awarded $102 million dollars for their role in uncovering fraud by Pfizer, who had illegally promoted the use of Bextra, a drug used to treat arthritis.
To look at more recent examples of whistleblower rewards, a physicist in Florida is slated to receive $7 million as a reward for reporting fraud committed by 21st Century Oncology Inc., a company that provides healthcare for those with cancer.
In March of 2016, it was announced that a doctor will receive $5 million for blowing the whistle on Respironics Inc., a Pennsylvania-based sleep therapy products supplier. In this case, the company provided kickbacks to free call center services, a violation of the Anti-Kickback Statute.
These are just a few examples of the rewards that whistleblowers have received for reporting financial fraud and fraud against the government. Since the False Claims Act was revised in 1986 to make it easier for people to report fraud, the government has recovered billions of dollars, with a good deal of those recoveries going to those that blew the whistle.
In fiscal year 2015, the government reported that it had recovered over $3.5 billion dollars for the fourth consecutive year. Of that $3.5 billion recovered in 2015, over half a billion dollars was awarded to the whistleblowers who filed suits against the institutions committing the fraud. For six years in a row, more than 700 whistleblower suits were filed under the False Claims Act. Even claims that did not involve government intervention increased in FY 2015.
There are some important caveats to note when talking about the rewards given to whistleblowers. The majority of whistleblower cases are not pursued by the Justice Department. It should also be said that anonymity, while guaranteed in the initial stages of a suit, is not necessarily guaranteed in perpetuity for whistleblowers. In other words, if you decide to move forward with information regarding fraud, you should retain the services of someone who knows what they are doing and is experienced in handling whistleblower claims.
Of course, the rewards of whistleblowing aren’t just financial. In so many cases, whistleblowers are simply doing the right thing by uncovering fraud. It’s not always an easy to decision to file a suit against an employer for their wrongdoing, but it is obviously the right decision. Whistleblowers provide a public service by coming forward to report fraud. Many whistleblowers also realize that when they see fraud and don’t report it, they are complicit in the wrongdoing, and that is simply unacceptable for those who feel a moral obligation to stand up against corruption.
There are many reasons that a person may choose to come forward and stand up against fraud and wrongdoing, but it is certainly a good thing that there are rewards awaiting those who successfully blow the whistle on corruption. By providing whistleblowers with security and financial benefits for coming forward with important information, the government can demonstrate that they are serious about tackling fraud.
In that sense, these rewards are more than just incentives: they are an absolute necessity for stopping the fraud that is so common against the government and the American people.
Bert Louthian is a whistleblower attorney in South Carolina who focuses on helping those who have been wronged, or who have witnessed wrongdoing to come forward to report fraud.