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October 04, 2022 | North Carolina Whistleblower

A Complete Guide to FCA Whistleblower Rewards

When whistleblowers provide information that leads to the successful recovery of funds stolen from the government, they may receive a reward. And for whistleblower lawsuits filed under the False Claims Act (FCA), also called qui tam lawsuits, their rewards can be up to 30% of the amount recovered by the government. This can be a substantial, even life-changing, result for doing the right thing and reporting fraud against the government!

However, there are conditions that must be met for a whistleblower to be eligible for a reward. Let’s dive a bit deeper into why the government gives whistleblowers possible rewards, how it determines the amount of any reward, and what conditions must be met for a whistleblower to be eligible for an reward. While there are many whistleblower reward programs, I will focus primarily on the potential rewards given to whistleblowers who file claims under the False Claims Act.

Why the government rewards eligible whistleblowers

Whistleblower programs are powerful and effective tools that help uncover fraud, waste, and abuse of government funds. Because the government has limited resources, it relies on the brave people who come forward and “blow the whistle” when they observe wrongdoing to supplement its own fraud detection efforts.

Data shows that offering whistleblower rewards is a productive way to generate high quality tips that can result in successful prosecutions. The presence of potential monetary awards sends a message to whistleblowers that their information is valued and encourages them to come forward with critically important information.

So, why does the government offer whistleblower rewards? Because it works. And when it works, it saves taxpayers millions of dollars.

Whistleblower reward amounts under the False Claims Act

The majority of whistleblower claims are filed under the False Claims Act, which states that whistleblower rewards can be up to 30% of the amount recovered by the government, not just the amount lost by government due to the fraud. This is an important distinction, because the FCA also allows the government to recover “treble damages,” or three times the amount of money it lost to the fraud, in addition to substantial civil penalties.

How much you ultimately may receive as a whistleblower can depend, to some degree, on your attorney’s negotiations with the government and determination to push for the maximum reward amount at the end of a successful case. Carolina Whistleblower Attorneys’ lead attorney, Bill Nettles, served as U.S. Attorney for the District of South Carolina, and during his tenure, South Carolina rose to 4th in the country for whistleblower recoveries.1

The impact of federal government intervention on whistleblower rewards

When a whistleblower files a qui tam lawsuit, the government must decide whether or not it will intervene in the lawsuit. When the government intervenes, it becomes the primary lead in the lawsuit, but it still enlists the aid and utilizes the information of the whistleblower to build its case. If the government decides not to intervene in the lawsuit, the whistleblower still has the option to proceed with the lawsuit independently. The government’s decision on whether or not to intervene impacts the amount of the potential whistleblower reward as follows:

  • If the government decides not to intervene in the lawsuit, and the lawsuit is successfully resolved, the whistleblower can receive up to 30% of the recovery.
  • If the government decides to intervene in the lawsuit, and the lawsuit is successfully resolved, the whistleblower can receive up to 25% of the amount recovered for his or her participation in the case.

The following example shows how a whistleblower reward could play out:

Ex: A whistleblower filed an FCA lawsuit that Pharmacy ABC was deliberately charging more for prescriptions, resulting in a $10M misuse of Medicare funds.

How to increase your chances of success as a whistleblower

Rewards are available when the whistleblower’s information is new, credible, and instrumental in resolving the lawsuit. Two of your greatest assets as a whistleblower are your inside access to, or knowledge of, the organization that is defrauding the government and your willingness to cooperate with the government. The amount of your participation can increase the amount of the award.

To increase your chances of success, you want to have the counsel of an experienced whistleblower attorney who understands the proper reporting channels, knows how to work with the government, and puts you first. If you don’t go through proper channels, you may lose your eligibility for an award. And an attorney who knows how to work with the government can present your case effectively.

Timing is of great importance, too. The first person to act is in the best position to collect a possible reward, so don’t wait.

Learn More: Dos and Don’ts of Becoming a Whistleblower

Examples of whistleblowers who received rewards

Because fraud against the government varies greatly, so too do the size and scope of whistleblower cases and their potential rewards. History shows that there are many individuals who have come forward to hold others accountable for their wrongdoing and have been rewarded handsomely for their efforts.1

For example:

  • '60 Minutes' whistleblower to receive $18 million1While U.S. Attorney, Bill Nettles and his team resolved a $95 million FCA lawsuit with Bank of America Corporation, J.P. Morgan Chase & Co., Wells Fargo & Company, and Citigroup, Inc., in which the whistleblower was awarded $18 million for her allegations of robo-signing against the mortgage servicers.1
  • Whistleblowers received almost $1 million for their participation in a qui tam lawsuit against RxAmerica involving Medicare’s Prescription Drug Program, known as Part D.1 Carolina Whistleblower Attorneys’ Gary Jackson handled the lawsuit against RxAmerica, who agreed to pay the government $5.25 million to resolve allegations that it misrepresented costs of prescription drugs on the Centers for Medicare & Medicaid Service website.4

If you suspect fraud against the government of any kind, we want to hear your story. An experienced attorney will review your case, free and confidentially.  Our attorneys are recognized by their peers for their service and their skill, and we can handle many different types of whistleblower cases. If you suspect fraud against the government, call us today at 1-888-292-8852.

FAQs

The following are questions about whistleblower reward laws and litigation that I am asked on a routine basis

How do I claim my whistleblower rewards?

You must wait until your FCA lawsuit is successfully resolved to claim any whistleblower reward since the amount of your potential reward is dependent upon the amount recovered by the government. Your whistleblower attorney can advise you on the timing and process for claiming your reward after a successful case.

Who qualifies to receive a whistleblower award?

People who bring forward information about fraud against government agencies may qualify for whistleblower awards when that information is used to successfully resolve a whistleblower lawsuit.

Is there an IRS whistleblower reward program?

Yes, there is an IRS Whistleblower Program that is designed to reward IRS whistleblowers who provide information that leads to the successful resolution of tax fraud and tax evasion schemes.

Can international whistleblowers qualify for rewards?

Yes, international whistleblowers can become whistleblowers for our government and share in the potential whistleblower rewards the same way U.S. citizens can. The Foreign Corrupt Practices Act and the False Claims Act are two of the laws that enable foreign whistleblowers to call out international fraud against the U.S. government.

John L. Warren, III avatar

John L. Warren, III

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About the Author

John Warren has spent a significant portion of his legal career in federal court handling whistleblower cases. After receiving his JD from Elon University School of Law, he clerked for the Supreme Court of South Carolina, the U.S. District Court of South Carolina, and the U.S. Court of Appeals. In private practice, he has worked alongside two former U.S. Attorneys for the District of South Carolina to fight for the rights of whistleblowers. John is admitted to practice in the U.S District Court for the District of South Carolina and the U.S. Court of Appeals for the Fourth Circuit.

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Whistleblower Attorneys

If you’re wondering if it’s a good idea to speak with a whistleblower lawyer about what you know, let us set the record straight.

  • Corporate ethics hotlines can be risky and may lead to termination. If you’ve already done this, call us immediately.
  • Your coworkers could be aware of the fraud – or complicit in it – and you should not talk to them about it.
  • The first claim to be filed under the False Claims Act can proceed – if you’re not first, you’re at a serious disadvantage and may get nothing (another reason not to speak to your coworkers about it).
  • A confidential discussion costs you a few minutes, but could save you time, stress, and money.

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