Whistleblower FAQ

A whistleblower is an individual with the courage to disclose to others information about fraud or other unethical activities with the aim of ending the bad practices. Some categories of whistleblowers are eligible for sizable financial awards for reporting fraud. We represent those whistleblowers with information about fraud on the government (False Claims Act / qui tam), violations of federal securities (SEC) and commodities (CFTC) laws and regulations, corporate tax law violations (IRS), and anti-money-laundering laws (Dept. of Treasury).

The best way to find out if you qualify as a whistleblower under one of several official whistleblower programs is to contact an attorney and explain your situation. There are four distinct whistleblower laws covering tax fraud, fraud committed against government programs (state and federal), violations of securities laws and violations of the Commodities Exchange Act.

Most whistleblower laws provide protections against retaliation. Some laws permit whistleblowers to file anonymously with the help of an attorney. There are also provisions in place that allow a whistleblower to sue for lost wages and other damages as a result of retaliation.

Whistleblowers have the opportunity to perform a great act of civic responsibility by helping to right a wrong. Additionally, whistleblowers who act in the public interest by exposing fraud are generally entitled to anywhere between 10 and 30 percent of money that the government recovers, including fines, as part of an enforcement action. Under the False Claims Act, if the government declines a whistleblower’s case and the whistleblower litigates independently, the whistleblower may be entitled to a larger percent of the overall recovery. Some of these recoveries have numbered in the billions. more »

Between the various whistleblower laws, there are many types of fraud covered, including:

In pharma and healthcare, schemes that fraudulently increase the price Medicare pays for patient care. Unlawful billing for procedures or supplies.

These examples are just some of the types of fraud covered by whistleblower laws. For more information on what each area covers, visit the pages below:

False Claims Act Whistleblowers
SEC Whistleblowers
CFTC Whistleblowers
IRS/Tax Whistleblowers

• Payments to physicians or hospitals from pharmaceutical companies or others in return for drug promotion or purchasing.
• Off-label promotion of drugs and medical devices.
• In defense contracting, intentional inflation of prices on government contracts or other schemes.
• Supplying the government with defective parts.
• Failure to comply with a government contract.
• Lack of quality control, or failure to properly test for defects or flaws in security.
• Improper inflation of prices or bid-rigging in obtaining a government contract.
• Tax fraud, tax evasion schemes, misrepresentation of income, unlawful use of foreign tax credits, transfer pricing fraud and various accounting fraud violations.
• Various forms of securities and commodities trading fraud, including violations of the Foreign Corrupt Practices Act, market manipulation and Ponzi schemes.
• Front running, in which a trader (often operating the trading venue itself) is aware of pending customer orders for a security and buys or sells unfairly.
• Accounting fraud, in which accountants fail to identify false information made by clients regarding their financial status.
• Outright theft from investors (embezzlement by stockholders).
• Pump-and-dump schemes and stock manipulation, including false statements regarding a public company’s financial reports and lying to corporate auditors.
• Insider trading.

Cases under the False Claims Act are filed under seal. Whistleblower cases are kept under strictly enforced confidentiality during the period of investigation. The case and its details remain confidential for a period of time while the government investigates the case. Whistleblower laws protect employees from retaliation as well, ensuring that they cannot be lawfully fired merely for blowing the whistle. If a whistleblower’s employer does retaliate, the whistleblower can sue for damages. The SEC, CFTC and IRS programs provide for complete anonymity with the help of an attorney.

Due to the nature of whistleblower litigation and the incentives that reward quick reporting of fraud, it is important to report fraud as soon as possible. If you are not sure if your information qualifies, or if you’re covered under federal whistleblower laws contact firm partner and head of the practice group Shayne Stevenson, who can confidentially answer your inquiries. Reporting fraud sooner ensures that your information reaches the government as quickly as possible. Whistleblower laws are time sensitive, and if stalled, your whistleblower claim runs the risk of being invalidated. Also, when evaluating a whistleblower case and planning a potential reward for the whistleblower, the amount of time between your awareness of the fraud and your reporting of the fraud does play a part in determining an award amount. Additionally, reporting fraud earlier helps ensure that you are the first one to report the wrongdoing, which can also impact whether you are rewarded at the extent of any such reward.

When Hagens Berman looks at a whistleblower case, it is treated like any case the firm is litigating. Under the False Claims Act the government has the right to intervene in the case at any point in the action. If the government determines that a whistleblower’s case has sufficient merit, and that the government has enough resources to investigate and prosecute the case, then the whistleblower remains involved in the case to provide ongoing assistance. While the whistleblower retains certain rights as the case goes on, the government effectively takes the lead in the case. Under the SEC, CFTC and IRS programs, the filed complaint is investigated by the government with any assistance you may provide.

Under the False Claims Act, which covers all fraud against the government, if the government decides not to intervene in a case, the False Claims Act authorizes a whistleblower to continue litigating the case him or herself. Hagens Berman helps whistleblowers present a case to the government, but when our attorneys believe the government has failed to intervene in a sound case that has the potential to make a difference and right a wrong, we prosecute the case without the government’s help.

Under the False Claims Act, whistleblowers cannot file or litigate their case without an attorney. Our firm, one of the nation’s largest and most successful plaintiff firms, devotes substantial resources to develop your case, work with the government to advance your case, and, if necessary, will litigate your case to the end.

Three factors distinguish Hagens Berman from other firms; our size, vast experience with fraud cases and our approach. Many times whistleblower cases are filed by very small law firms who lack the resources to continue litigation if the government refuses to act. Many such firms also lack a background in complex areas of securities fraud and other complex fraud schemes used by large companies. Hagens Berman is different. Our scope, experience and geographic reach allow us to fully research and develop legal claims before presenting them to the government. If the government refuses to take a case, we will have laid the legal groundwork needed to continue the case without the government’s help. Unlike many whistleblower firms, we see no problem with taking on large corporations over important issues; such litigation has been our mainstay since the firm was established in 1993. Find out more about what makes Hagens Berman different.

In an effort to curb Wall Street excesses, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Recognizing that corporate insiders and expert market observers play a critical role in rooting out securities law violations, the Dodd-Frank bill built vigorous whistleblower protections into the legislation known as the “Wall Street Tip-Off Law.” The law empowers the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission to award between 10 percent and 30 percent of any monetary sanctions recovered in excess of $1 million to whistleblowers who provide information leading to a successful enforcement action. Hagens Berman represents whistleblowers with claims involving substantial violations of the Securities Exchange Act and the Commodities Exchange Act.

A qui tam action is a legal action which allows any person, including individual citizens, associations and even businesses, to bring a whistleblower action on behalf of the government and themselves under the False Claims Act.

The False Claims Act was passed by congress in 1863, following a string of fraudulent actions committed against the government during the Civil War. It was created to impose liability on anyone, usually federal contractors, who attempt to defraud government programs. One notable provision of the False Claims Act is the qui tam provision, which allows a person not affiliated with the government to file a suit on behalf of the government in exchange for a reward. Nearly 30 States also have their own False Claims Act laws. The False Claims Acts, state and federal, also protects whistleblowers from retaliation by their employers. Sometimes the same fraudulent conduct can provide the basis for a whistleblower action under other federal programs, including the SEC, IRS, and CFTC programs. Find out more about the False Claims Act.

Hagens Berman represents whistleblowers under the IRS whistleblower program amended and improved with the Tax Relief and Health Care Act of 2006. The IRS Whistleblower Office offers a reward to whistleblowers who come forward with information about corporations, persons, or any other entity that cheats on its taxes. In the event of a successful recovery of government funds in excess of $2 million, a whistleblower can be rewarded with up to 30 percent of the overall amount collected in taxes, penalties and legal fees. Hagens Berman helps IRS whistleblowers to present specific and credible information to the IRS regarding tax fraud. The firm has 70 attorneys in ten cities across the United States, giving it the resources and fortitude necessary to take on even the largest corporations. Find out more about IRS whistleblower laws.

Beyond federal whistleblower laws, most states have an additional state law that seeks to protect and incentivize whistleblowers. Click for a list of states and their respective whistleblower laws.

If you have other questions about whistleblower laws, protections or process specific to your case, contact Hagens Berman’s whistleblower practice or Partner and whistleblower attorney Shayne Stevenson who heads our whistleblower practice by emailing [email protected] or calling 206-623-7292.