As we make headway into 2018, it’s worth looking back at how great 2017 was for whistleblowers holding fraudsters accountable with record recoveries.
Specifically, those who pursued their False Claims Act lawsuits after the government declined to intervene brought in a record recovery of $590 million in 2017, according to U.S. Department of Justice numbers reported by Law360. That represents the largest intake for FCA whistleblowers without government intervention since 2015, when declined cases came out to be $510 million.
Although FCA lawsuits, at a certain point in the process, typically involve government intervention — in which government attorneys take over a case and see it through — this is not always so. However, even though the government doesn’t take over the case, that doesn’t mean it doesn’t have merit. The lawsuits are still viable, which is reflected in the figures mentioned above.
That $590 million recovery for cases the government declined makes up a not insignificant chunk of the approximately $3.7 billion total that whistleblowers recovered from companies and organizations that defrauded the federal government in 2017.
How a Whistleblower Lawsuit Works
Getting to the point of successfully getting the government’s money back — thereby holding a fraudster accountable and getting some compensation for your trouble — involves a lengthy journey with the help of lawyers, investigators, and support staff. Whistleblowers are never alone and their confidentiality is respected throughout the process.
The first step is contacting a law firm with a track record of helping whistleblowers prepare the best case possible in which the federal government can intervene, or one that the law firm will take to court with eye on victory.
Seasoned attorneys, an investigative team, and a support staff at the law firm will evaluate the evidence that supports allegations of fraud. They could ask you to take further steps, such as obtaining more documentation, to bolster your case. They might also recommend that you internally report fraud or take another action before filing a claim.
The investigators play a key role in gathering evidence. They have extensive backgrounds in white-collar crimes and law enforcement work, among other things, and know what to ask you about in order to develop the strongest possible case.
“Our job is to basically find out what the allegation is, how long it’s been going on, and what kind of evidence a person may have or have access to,” Morgan & Morgan whistleblower group investigator Lee Walters said in an interview recently.
In so-called “qui tam” lawsuits filed under the FCA — lawsuits filed on behalf of the government to expose fraud with an eye on the government intervening in the case — your attorney will draft a complaint to file in court, leading the way to litigate your case. The likelihood of success is generally greater when the government intervenes, so having a talented attorney to who knows just what the government wants in a case is crucial.
(Other types of whistleblower suits could have a different path — more information on that is in the whistleblower lawsuit FAQs.)
At this point, after a whistleblower’s legal team builds a case showing how a company is defrauding the government, the attorney will file a lawsuit in federal court. Then government attorneys review the complaint and decide whether or not to intervene — i.e., to take over the case.
What Happens When the Government Takes a Case and When It Doesn’t
A key reason for the qui tam provision in the FCA is this: The federal government can’t monitor each and every company and transaction, so it relies on employees or others close to the action to call out fraudulent behavior.
When a whistleblower retains an attorney and files a lawsuit, it’s doing so, in a sense, on behalf of the government. The whistleblower sees fraud and chooses to initiate action thereby notifying the government that something wrong is happening. This is different from most lawsuits, in which a party injured physically or financially is the one filing suit against an allegedly offending party.
Oftentimes, if a case is solid enough and meets government attorneys’ criteria, they will take it up and proceed with it, so that the whistleblower becomes what is called a “relator” in the case. For the relator’s efforts — which include years upon years of work and potential risk of losing their career and even their friends’ careers, the law offers a portion of any funds recovered as a reward. (More on that in a bit.)
Should the government decline to take the whistleblower’s case, that doesn’t mean all is lost. The legal team who shepherded the case to the point of filing a complaint could still decide to proceed with litigation and even win, returning ill-gotten gains to the government and recovering a reward in the lengthy and often difficult process.
What Makes The Recovery So High?
A “relator” in suits the government takes — can get a healthy sum from a lawsuit because of the way the law penalizes those who defraud the government. This is true whether or not the government decides to intervene.
If the government accepts a case, the amount of compensation is generally between 15 and 25 percent of the amount collected either through a settlement or a jury verdict. If the government declines, the eligibility for recovery is in the 25 to 30 percent bracket.
Damages are calculated by subtracting what the government should have paid had the claim not been false from what the government actually paid. The government gets the difference times three.
Furthermore, if a company or organization billed the government with a flurry of false claims, the government can recover an additional $5,500 to $11,000 per claim.
Doctors’ offices are one example of a business that might defraud the government with fraudulent billing.
Let’s take a look at an example. If a doctor’s office billed Medicare 1,000 times for a $200 medical service it didn’t actually provide to patients, that’s $200,000 in ill-gotten gains. If an employee files a whistleblower suit, under law the government could potentially collect $600,000.
Then there is the civil penalty awarded per claim: A minimum of $5,500 times 1,000 for a total of $5.5 million.
Now, the minimum potential value is at $6.1 million. The whistleblower could get $915,000 to $1.525 million of that in a suit the government takes and $1.525 million to $1.83 million in a declined case.
That’s just one very specific example involving merely one office. Consider that whistleblower lawsuits against BigPharma, hospitals, and defense contractors can involve thousands of individual false claims. The total recovery in damages and civil penalties, in addition to a whistleblower’s share, can be significant.
With all of that in mind, it’s no wonder the DOJ figures are as high as they are — high numbers go along with numerous FCA verdicts.
Filing a Whistleblower Lawsuit Is Free
Getting justice is important to you, perhaps even more important than the amount of money you could get from winning a case. You take fraud seriously and recognize the damage it is doing to society and the taxpayers dollars it wastes.
If you’re considering filing a whistleblower lawsuit, have thought about the time and personal-life investment involved, and are ready to contact us in order to right a wrong, keep in mind that we don’t charge you anything unless you win. Morgan & Morgan pays for all expenses incurred in a whistleblower lawsuit, including travel and hiring expert witnesses, among other things.
Contact us today for a free, confidential, no-risk case evaluation. Our team is ready to try to help you get justice.
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