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Whistleblower Compensation & Qui Tam Settlements

Whistleblower compensation is often substantial. Since the inception of the False Claims Act during the Civil War, it has been understood that blowing the whistle takes courage and a fair amount of risk on the part of the relator. For this reason, the federal government rewards those citizens that perform their duty handsomely for providing information about fraud.

Qui tam verdicts and settlements are calculated as a percentage of the amount the government recovers in the lawsuit. In many whistleblower cases, the total amount recovered by the federal government is quite substantial; each separate contractor invoice or Medicare claim is considered a separate false claim for purposes of calculating the civil penalty. For example, in a Medicare whistleblower lawsuit, each individual claim for reimbursement for medical services or prescription drugs is considered a false claim.

Do Whistleblowers Get Paid?

The short answer is yes. If an individual blows the whistle and files a valid qui tam lawsuit on behalf of the government, he or she is entitled to compensation: a percentage of whatever financial recovery results from the lawsuit.

Whistleblower Verdict and Settlement Award Amounts

A company that submits a false claim to the federal government is liable for three times the amount that has been defrauded. In addition, the court must also assess a civil penalty of at least $5,500, but not greater than $11,000, for each false claim that your employer submitted to the federal government.

  • If the government chooses to intervene, the whistleblower will be compensated between 15%-25% of the amount collected either through a settlement or trial verdict.
  • If the government declines to intervene, the whistleblower is eligible to receive 25%-30% of the total amount recovered.

Example of How A Whistleblower’s Reward Is Calculated

Damages are calculated by subtracting what the government should have paid had the claim not been false from what the government actually paid. For example, assume a hospital has submitted a thousand false claims to Medicare for $100 each for medical services that were not provided to patients. If an employee at the hospital files a whistleblower lawsuit, the government may collect three times the amount of the false claims, plus $5,500 to $11,000 per claim.

Three Times Amount Defrauded: 1,000 X $100 X 3 = $300,000

Minimum Civil Penalty: 1,000 X 5,500 = 5,500,000

Total Value of Whistleblower Lawsuit: $5,800,000.

Whistleblower’s Reward: $870,000 - $1,740,000

Because whistleblower lawsuits against pharmaceutical companies, hospitals, and defense contractors often involve thousands of individual false claims, the total amount recovered by the federal government in damages and civil penalties, as well as the total whistleblower payout, can be significant.

To learn if you are eligible to receive a financial reward for reporting your employer’s fraudulent behavior, please contact us for a free case evaluation from our experienced whistleblower attorneys.

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