Whistleblowers can be awarded anywhere between 15% and 30% in False Claims Act cases, depending on whether or not the government intervenes in the case. The Department of Justice has guidelines that help determine where in that range the relator’s share will fall.
There are many factors that can either increase or decrease a reward; here are 10 of the key components whistleblowers and their counsel should bear in mind.
How promptly a whistleblower reports fraud to the government can have a significant impact on the percentage of an reward. Once a relator learns about the fraudulent activity, the time it takes them to file a qui tam action will be taken into consideration during relator’s share negotiations.
While relators should certainly think very carefully about whether to formally blow the whistle, there’s no disputing that time is of the essence when filing these types of cases.
Having a specialized qui tam attorney who already knows the ropes of False Claims Act litigation can be helpful in ensuring that the lawsuit is promptly and properly filed.
2. Reaction to the discovery of fraud
Though it is not necessary feasible for all whistleblowers to report fraud first to their employers (for example, because their employer has created an obviously hostile environment for whistleblowers), reporting internally is one of the first steps for many relators.
When calculating the relator’s share, the government considers whether the relator put in a reasonable effort to stop the fraudulent activity.
Some whistleblowers go to a supervisor or human resources to report the fraud, and if the report is ignored, they may follow up to see why the fraud has not stopped. This is the point at which many whistleblowers decide to hire a qui tam lawyer.
3. Involvement in the fraud
In some circumstances, it is very difficult for whistleblowers to avoid being complicit in some part of their employer’s fraud.
Though it is illegal for employers to retaliate against whistleblowers, it is unfortunately not uncommon for a manager or administrator to threaten the whistleblowing employee with demotion, termination or other professional repercussions.
While the government would not offer rewards to a relator that orchestrated or willfully coordinated a fraudulent scheme, they may reward a whistleblower who caved to professional pressure to comply. Ultimately, the relator is choosing to do the right thing by reporting the scheme to the government.
The extent of the whistleblower’s involvement in the fraud will, however, play a role in how much of a reward they are offered.
4. Safety concerns
Fraud against the government is not just a financial violation; in many cases, it has cost patients their lives, threatened the safety of military personnel and compromised the safety of federal employees.
In False Claims Act cases, the Department of Justice needs to be made aware of any possible safety concerns when the whistleblower brings their qui tam action. It is unwise to wait until later to share with the government that the fraud poses a threat to patients or other potential victims.
5. Extent of the fraud
Because government prosecutors have limited resources, they are unable to intervene in qui tam actions for every single instance of fraud. Though all fraud should be reported, the geographic scope of the fraud is relevant.
For example, if a nurse reports a fraud scheme that took place in one Florida branch of a national hospital corporation, her counsel would do well to find out if that scheme is present at other branches, or even throughout the entire organization.
Cases with national impact can have a greater chance of warranting government intervention; they can also justify a greater relator award.
6. Value of the relator’s information
Whistleblowers are undeniably essential to the government’s efforts to fight fraud, but certain types of information are considered more critical than others when calculating the relator’s share.
The relator may be awarded a smaller percentage if the information they reported was discerned in large part from publically available information. It could also decrease if the government was already aware of some aspect of the fraud scheme.
What the government is most interested is information that they could not have known–or would have taken far longer to find out–were it not for the insider information the whistleblower provided.
7. Relator and qui tam counsel’s compliance
It is important for both whistleblowers and their attorneys to be actively helpful throughout the course of the government’s investigation. That means complying with any requests for further evidence, such as text messages and adhering to seal requirements that dictate confidentiality throughout the case.
It also means that a relator’s counsel should prepare the relator well for the government interview and for any other situations that require an accurate, consistent testimony. When you file a qui tam action, you are suing a fraudulent party on behalf of the government. Relators and their counsel should remember that ultimately, it is not their case; it is the government’s case.
8. Complexity of the case
One of the reasons the Morgan & Morgan Whistleblower Attorneys partner with former FBI investigators is for their assistance in preparing a highly detailed and thorough disclosure statement.
Our investigators help whistleblowers collect sufficient, relevant evidence, and as a team we help the whistleblower recount the story of the fraud they witnessed in as much detail as possible.
Failing to adequately prepare any aspect of the filing could cause additional work for the already overworked government prosecutors, and that can easily reflect poorly on the relator.
9. Size of the recovery
False Claims Act recoveries range quite significantly in size. For the purposes of determining the relator’s share, the government is more likely to give the whistleblower a larger percentage when the recover is lower.
For example, if the government recovers $150 million in defrauded taxes from a company, the relator in that case is more likely to get a lower percentage of the share, since the overall amount of that reward is still substantial.
10. Impact on the relator’s life
Being a whistleblower can have a significant impact on a person’s life. In deciding on the relator’s share, the government takes into consideration any professional repercussions or retaliatory issues that may have befallen the relator.
Though there still exists a perception that whistleblowers are in it for the money, the reality is that even in the small percentage of cases that lead to a substantial reward, the lives of relators are forever changed. Whistleblowers persist in the face of adversity because they are committed to doing the right thing.
To learn more about the process of blowing the whistle, listen to The Whistleblower Attorneys Podcast.