What is a Whistleblower?
A whistleblower is typically a public or private employee but can be anyone who reports fraud or other misconduct that is committed against a government agency, by an individual or private entity.
How Do You Become a Whistleblower?
- You have information regarding fraudulent activity or other wrongdoing against the government.
- You must be the first one to report the conduct.
- It cannot be public information.
- As a whistleblower, you can file a lawsuit on behalf of the government, claiming damages for the government, even though you are not involved in the activity.
- You are also entitled to monetary compensation for reporting the illegal conduct, if the case is successful in court.
These general requirements are also more specifically discussed later. In order to help determine whether you may have a whistleblower claim, it is important to be familiar with the kinds of conduct that a whistleblower may uncover, the applicable laws pertaining to whistleblower claims, and the requirements that a potential whistleblower must meet in order to file a lawsuit.
Types of Illegal Conduct Whistleblowers Report
A whistleblower may uncover many different types of fraud committed against the government, including:
Health Care Industry Fraud – This generally involves pharmaceutical companies, insurance companies, physicians and drug wholesale companies. Medicare and Medicaid fraud are common subjects of whistleblower healthcare claims.
Military and Defense Contractor Fraud – Since defense contracts are so large, they are ripe for fraudulent activity such as overcharging or padding contracts and invoices or providing inferior products as a substitute for those promised under a contract.
Financial Fraud – This type of fraud often involves mortgages and pension funds where individuals or companies falsify various information. Securities fraud is also a common type of financial fraud and there are specific whistleblower laws that you should be aware of. For instance, the Securities and Exchange Commission has a Whistleblower Program that provides rewards to whistleblowers who report a wide variety of financial fraud.
Environmental Fraud – Whistleblowers are critical to uncovering environmental misconduct, which is often difficult for the government to detect. Generally, a whistleblower reports conduct that violates environmental regulations, and results in penalties under federal laws, including the False Claims Act of 1863.
The False Claims Act of 1863
The False Claims Act of 1863 is one of the most important laws for whistleblowers because it allows any private citizen to sue on behalf of the government.
History – The provisions of this act were originally passed under President Abraham Lincoln to address rampant cheating by government contractors during the Civil War. The law is also known as The Lincoln Law, and has gone on to become a powerful tool to fight corruption in government as well as private companies.
Purpose – It is called the False Claims Act because it prohibits individuals and entities from submitting false claims to the government for payment, or from avoiding payments to the government.
Coverage – In general, however, a wide array of conduct falls under the federal False Claims Act, which also contains protections for whistleblowers.
Exclusions – Some claims are excluded under this act, such as tax claims under the Internal Revenue Code (IRS), but whistleblowers can bring federal tax claims under the IRS Tax Whistleblower Program, and state tax claims under certain state whistleblower laws, such as the New York State False Claims Act.
Protections – As a whistleblower, you do not have to fear reprisal for bringing a claim because you are protected from retaliation for reporting government fraud under the False Claims Act of 1863. Many other federal laws provide more specific protection to whistleblowers who report illegal conduct regarding industries such as airlines, banking and financial institutions, and myriad other business sectors. In addition, there are several state laws ensuring that whistleblowers are not subject to adverse action for coming forward.
Penalties – The penalties for violations of the False Claims Act are three times the amount of the government’s damages, plus up to $11,000.00 for each false claim.
Qui Tam Whistleblower Lawsuits under the False Claims Act
What Does Qui Tam Mean?
Historical Definition – The term “qui tam,” is derived from the Latin phrase, “qui tam pro domino rete quam pro seipse,” which means “he who sues for the king as for himself.” Essentially, under common law a private citizen could sue on behalf of the government and if the case was successful the government received damages. In addition, the person who brought the suit was entitled to a reward.
Modern Application – Today, under these Qui Tam provisions, anyone can file a whistleblower lawsuit, and receive monetary compensation, provided certain conditions are met.
How to Become a Qui Tam Whistleblower?
In order to file a Qui Tam whistleblower lawsuit, the following must exist:
- Have Information Regarding Fraud – You must have information that indicates that a person or entity committed fraudulent activity against the government.
- First to Report – You must be the first one to report the wrongdoing. This person is known as the relator or the whistleblower. You do not have to have personal knowledge of the activity. It is imperative not to speak with anyone else about your claim, except an attorney, so that it remains private.
- Not Public – The information must not already be known to the public.
- No Conviction – You must not have been convicted of any criminal activity arising from the whistleblower claim.
- Government not a Party – The government must not already be a party to a proceeding regarding the same conduct.
What Monetary Compensation Can a Whistleblower Receive?
Government Option to Join – The compensation available to a whistleblower under the False Claims Act, depends upon whether, after filing the lawsuit, the government exercises its right to join the case.
Whistleblower Compensation Without Government – If the government chooses not to intervene, the whistleblower can receive 25 to 30 percent of the amount the government recovers.
Whistleblower Compensation if Government Joins – If the government decides to become a party, the whistleblower still receives a reward if the claim is successful, but it is less than it would be if the government was not part of the case. The whistleblower’s award is typically between 15 and 25 percent when the government participates.
Amount of Whistleblower’s Reward – Whistleblowers can receive substantial compensation because the penalties for violations of the False Claims Act are three times the amount of the government’s damages plus up to $11,000.00 for each false claim.
Seeger Weiss LLP Whistleblower Lawsuits
Seeger Weiss LLP has extensive experience representing whistleblowers in a variety of federal and state matters.
Warner Chilcott $125 Million to Resolve Kickback Allegations
Seeger Weiss LLP represented two former Warner Chilcott drug sales representatives who were the relators in a whistleblower lawsuit against Warner Chilcott. The Department of Justice found that the company had a marketing scheme that involved paying kickbacks to health care professionals to prescribe its drugs, as well as filling out and submitting fraudulent prior authorization requests to evade Medicare and Medicaid formulary restrictions.
How Much Did the Whistleblowers Get?
Warner Chilcott eventually paid $125 million to settle the kickback allegations. In addition, several officers of the company were indicted. The whistleblowers received approximately $22.9 million, or just under 20 percent of the settlement, as their reward for coming forward.
Whistleblower Receives $10.5 Million Reward From $54 Million CareCore National LLC Recovery
Seeger Weiss LLP also represented the whistleblower in another healthcare fraud lawsuit, in which a Licensed Practical Nurse alleged that CareCore National LLC, trained its nurse employees to violate its own protocols. Specifically, under CareCore’s stated protocol, nurses were required to have doctors review and decide any pre-authorization requests that failed to meet certain criteria. These requests were required by CareCore’s customers that provided services to the beneficiaries of government programs through Medicare Part C and Medicaid Managed Care.
What Was the Fraudulent Conduct?
CareCore directed its nursing staff to “Process As Directed” or to “PAD” certain of those cases that had been sent for a doctor’s review. For these “padded” cases, nurses were instructed to issue pre-authorizations for diagnostic testing even though the set criteria had not been met and the doctors had not conducted the required review. As a result, the managed care organizations and other providers, including those with which the government contracted, paid for costly diagnostic tests, that were not properly authorized as medically reasonable or necessary.
How Much Did the Whistleblower Get?
In this case, the whistleblower received approximately $10.5 million —or the equivalent of 20 percent of the government’s recovery.
Mohan’s CUstom Tailors $5.5 Million Whistleblower Settlement Under NY State False Claims Act
This case involved the first whistleblower settlement under the 2010 tax whistleblower amendment to New York’s False Claims Act. Seeger Weiss LLP represented the relator in this groundbreaking case.
The whistleblower claimed that celebrity tailor Mohanbhai Ramchandani, popularly known as “Mohan,” and his business, Mohan’s Custom Tailors, committed tax fraud against New York State over a ten-year period, resulting in millions of dollars in unreported sales and income taxes.
How Much Did the Whistleblower Get?
Mohan was liable for $5.5 million under the settlement reached with the New York State Attorney General, and the whistleblower received a reward of $1.1 million, or 20 percent of the government’s recovery.
What Should I Do If I Want to File A Whistleblower Claim?
Whistleblower laws are complex and nuanced. If you believe that you may have a whistleblower claim, it is important to obtain legal advice from experts such as Seeger Weiss LLP.
Recent Whistleblower Case Settlements
- Warner Chilcott Healthcare Fraud Settlement – $125 Million
- Doshi Diagnostic Imaging Services – $15.5 Million
- Tailor Mohan – $5.5 Million
Seeger Weiss has significant experience in whistleblower and qui tam litigation, including former federal and state prosecutors able to present the case to government authorities to make sure the claims receive serious consideration and, when needed, navigate overlapping criminal law issues.
Our attorneys have participated in major and groundbreaking whistleblower actions including:
- Representing a relator in the largest healthcare fraud case ever settled — $3 billion paid in settlement by pharmaceutical giant GlaxoSmithKline (GSK) for unlawful and misleading marketing of drugs
- Representing a relator in a qui tam lawsuit against pharmaceutical giant Abbott Labs, alleging unlawful marketing of the anti-seizure drug Depakote, which settled for $1.6 billion
- Representing the relator in the first-ever tax settlement under the New York State False Claims Act against famous New York City custom tailor Mohan
- Representing the relator in a qui tam lawsuit against drug wholesaler McKesson Corp., alleging fraudulent inflation of drug prices, which settled for nearly $350 million
- Representing a relator in a qui tam lawsuit against pharmaceutical manufacturer Forest Labs, alleging off-label marketing and paying kickbacks to prescribing doctors, which settled for over $300 million