If you have inside information that fraud is occurring at your workplace against the government or securities investors, you might want to learn about the whistleblower process. Many people who decide to come forward are regular workers who are simply doing their jobs. According to the National Business Ethics Survey of 2007, 56% of workers witness illegal conduct or fraud at their jobs. There are three key whistleblower programs under federal law that provide avenues for whistleblowers, including the False Claims Act, the Dodd-Frank Act, and the IRS whistleblower program. In some situations, claims might fall under several laws. The process and timeline for a case will depend on the program under which it is filed. The attorneys at Swartz Swidler can explain the procedure and the timeline that might apply in your case.
Timelines for reporting fraud
The amount of time that you have to file a claim will be controlled by the relevant statute of limitations. All whistleblower cases have to be filed within a certain time frame that begins running from the date of the illegal conduct. The statute of limitations for reporting fraud against the government under the False Claims Act is six years from the date the fraud is discovered. The limitations period is extended to 10 years if the fraud remained unknown before the whistleblower discovers it and comes forward. The SEC and IRS whistleblower programs have several statutes of limitations. Some of these limitations periods can be as short as three years. When you report the unlawful conduct quickly, you can increase the chance that your claim will be successful.
Why you should contact a lawyer
There are several reasons why you should get help from a lawyer if you want to become a whistleblower. If your claim falls under the False Claims Act, you are required to be represented by an attorney. If your claim falls under the SEC or IRS whistleblower program, having an attorney will allow you to stay anonymous.
An attorney can help you to organize your evidence, file your claim, and guide you through the process. This can help to increase the chance that your case will succeed. You cannot collect a reward unless the claim succeeds, and the government can recover money based on the information that you provide.
Case organization
When you first meet with an attorney, he or she will determine whether he or she is willing to accept representation. Your lawyer should explain whether you have a valid basis for filing a claim. Whistleblower claims are complex and expensive, which means that most lawyers will only agree to accept cases in which the fraud has been extensive and has resulted in losses of millions of dollars.
If a law firm agrees to accept your case, your attorney will start to organize your case. This will include a review and analysis of the fraud, a review of all of the information and documents in your possession, and an in-depth investigation of the company that is involved. You should avoid talking about the case to anyone during this process. If you discuss the investigation with anyone other than your lawyer, you may jeopardize your claim.
If the investigation and organization of your information reveal that your claim is viable, you will need to decide whether you want to move forward. If you do, your attorney will ask you to enter into a retainer agreement. This agreement will outline how your attorney will be paid.
False Claims Act claims
If you have inside knowledge that your company has perpetrated a fraud scheme against the government that has caused the government to lose money, your claim will likely fall under the False Claims Act. These cases are called qui tam claims. They are the most common type of whistleblower claim. Under the FCA, you are granted a private right of action, which allows you to file a lawsuit on behalf of the government against the company that has perpetrated the fraud. Your complaint will be filed under seal and will include information about how the company has engaged in fraud against the government. By filing the complaint under seal, the fact that the lawsuit has been filed will only be known by your attorney, the federal government, and the court.
Filing the complaint under seal prevents the company from knowing that it is under investigation, and it also protects you. Your attorney will submit a disclosure statement to the federal authorities that contains the evidence that has been collected. This evidence will be used by the U.S. Department of Justice to determine whether it will agree to pursue your claim. The government can choose to intervene in your case, but it is not required to do so. If it does not intervene, you will have the right to pursue your case in court. If you are successful, you may receive a larger reward.
Common examples of fraud under the FCA
Some common examples of fraud that might be prosecuted under the FCA include the following:
- Off-label marketing of prescription drugs
- Fraudulent Medicare billing for services that were not performed
- Selling adulterated medications
- Delivering substandard goods that were paid for by federal dollars
- Bribery or kickbacks to obtain federal contracts
- Collusive bidding to obtain federal contracts
Whistleblower rewards under the FCA
The reward that you might receive under the FCA will be a percentage of the total monetary amount that the government recovers based on your information. The FCA provides two ranges for rewards based on whether the government intervenes. The two ranges are from 15 to 25% when the government intervenes or from 25 to 30% when the government does not. The final percentage that might be awarded to you will be determined by the importance of your information to the success of the case.
Whistleblower claims under the SEC program
If your claim falls under the SEC whistleblower program, the process is different. To report securities or financial fraud, your attorney will submit a Form TCR or its equivalent through a special SEC system called the Electronic Data Collection System. Your claim should contain thoroughly researched information to attract the interest of the authorities.
Whistleblower protections from the SEC
Under the SEC whistleblower program, you can file your claim anonymously through your attorney. Under the Dodd-Frank Act, the SEC is prohibited from releasing details about you that could potentially identify you while the claim is being investigated. Your attorney will submit the claim for you using the TCR form. The whistleblower provisions of the Dodd-Frank Act also protect you against any retaliation that you might face.
SEC whistleblower protections against retaliation
If your employer takes an adverse job action against you in retaliation for filing an action with the SEC, the Dodd-Frank Act allows you to file a lawsuit against your employer for wrongful termination or discrimination in federal court. If the court finds that your employer engaged in prohibited retaliation, you will be entitled to receive double back-pay with interest and to be reinstated to your former job. You will also be entitled to your attorney’s fees. The provision also applies third parties that were employed as agents of the company instead of as employees such as bankers, accountants, or salespeople.
Rewards for SEC whistleblowers
SEC whistleblowers whose claims are successful will receive rewards if the authorities recover money above $1 million based on their information. Your reward may range from 10 to 30% of the total that is collected. This means that you will receive at least $100,000 up to millions of dollars if you succeed on your SEC claim and more than $1 million is recovered.
IRS whistleblower claims
The IRS whistleblower law allows anyone who knows that a person or company is committing tax fraud to file an anonymous tip through an attorney. This helps to preserve your anonymity throughout the case. To start this type of claim, you must submit IRS Form 211 and include evidence and documents of the scam.
The IRS whistleblower program was created by the government to fight against tax evasion and tax fraud. An estimated $450 billion is underpaid each year in taxes, which means that the burden is unfairly shifted onto the public at large. The Tax Relief and Healthcare Act was passed in 2006 by Congress, and it was modeled after the False Claims Act. Since the passage of the law, the IRS has been able to recover hundreds of millions of dollars that should have been paid in taxes.
Protection under the IRS whistleblower program
You can remain anonymous when you come forward with information under the IRS whistleblower program by hiring a lawyer to represent you. Your attorney can file Form 211 and attach the relevant documents for you. The form can then be sent to the correct IRS office. Your identity will remain protected during the investigation.
IRS whistleblower program rewards
If the IRS recovers money because of the information that you provide, you will be entitled to 15 to 30% of the total. The information that you provide to the IRS must not be commonly accessible or publicly available. Your reward amount might be increased based on the length of time that you took to come forward to report the information to the government. Providing a detailed submission with in-depth technical and legal analyses of tax records might also help you to secure a higher percentage.
Common examples of tax fraud
Some common examples of tax fraud schemes that might result in a reward include the following:
- Omitting or under-reporting income from tax returns
- Falsifying accounting records and books
- Claiming deductions for which a company is not eligible
- Claiming more for tax deductions than for which they are eligible
- Hiding or transferring income or assets
The government’s initial investigation
After a whistleblower claim has been filed together with any evidence that you have, the government will begin an investigation. If your claim falls under the FCA, staff with the DOJ will spend months researching the company and the fraud scheme and interviewing people. The government will then decide whether it wants to intervene in your case. If it does, it will choose DOJ lawyers to take over the case’s prosecution or will work with your lawyer to build the strongest possible case. If the government decides against intervening, you will have the ability to pursue the case on your own to get a higher reward. If your claim falls under the SEC or IRS whistleblower programs, you will not be able to pursue a claim on your own if the government declines to intervene.
If the government intervenes, the Department of Justice, the Securities & Exchange Commission, the Commodity Futures Trade Commission, or the Internal Revenue Service will lead the investigation. It will litigate the case to try to reach a settlement or to collect fines.
While this is occurring, you will primarily wait for the case to finish. The authorities might occasionally contact you through your attorney to request additional information or to help the investigators to understand certain situations.
Get help from the attorneys at Swartz Swidler
If you wait for a long time to come forward with your information, the chances that your claim will succeed will be diminished. You should not wait to contact an experienced whistleblower attorney at Swartz Swidler when you believe that you have inside information about fraud at your company. Whistleblower cases are highly complex. If your claim falls under the FCA, you will be required to hire a lawyer. Contact us today to schedule a free and confidential consultation by calling 856.685.7420. You can also contact us online by completing our online contact form.
