When Should a Whistleblower Report Fraud?

Whistleblowers should report fraud as soon as possible in order to ensure that they are properly compensated for their willingness to do the right thing and help the government hold companies accountable. However, it is equally important that potential whistleblowers are confident that the information they are supplying qualifies as fraud. That’s why a whistleblower should always first speak to an attorney with the intelligence and experience to properly advise about the strength of the allegations and the risks and benefits of reporting. This should be done even before reporting internally – an act which can have immediate consequences for a whistleblower.

In order to establish what is and isn’t reportable fraud and when and how to blow the whistle on it, it is critical that whistleblowers contact a law firm with the expertise, track record and resources to successfully guide them through this complicated process. And no firm is better equipped to handle whistleblower cases than Hagens Berman.

WHY IT IS IMPORTANT TO REPORT FRAUD AS SOON AS POSSIBLE

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, contact firm partner and Head of Hagens Berman’s whistleblower practice, Shayne Stevenson, who can confidentially answer your inquiries.

Reporting fraud sooner ensures that your information reaches the government as quickly as possible. Reporting it after speaking with counsel who can best advise you helps you report in a manner that will be heard and will protect you in the process. Whistleblower laws are time-sensitive, and if stalled, your whistleblower claim runs the risk of being too late or losing priority to others reporting first. 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 plays 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. Waiting too long runs the risk of other whistleblowers filing a similar claim first, thus better positioning themselves for a financial windfall at the end of a successful investigation. That is true even if you have stronger and more compelling information. If whistleblowers wait too long to report fraud after it’s committed, they’re liable to receive a smaller reward. And of course, the bad actor gets away with the fraud for even longer.

Find out more about whistleblower rewards »

HOW TO KNOW IF WHAT YOU’VE WITNESSED QUALIFIES AS FRAUD

With the help of an experienced whistleblower attorney, whistleblowers are able to file claims under the False Claims Act , and/or under the confidential whistleblower programs of the SEC , CFTC and IRS . The information a whistleblower provides must be original (i.e., it cannot be public information), specific, and credible. It’s important for a prospective whistleblower to know exactly what defines fraud under the various whistleblower programs and the laws enforced by the several federal and state agencies who investigate whistleblower cases. There are numerous types of fraud, but here are some of the most common:

Payments to physicians or hospitals from pharmaceutical companies in return for drug promotion or purchasing
Promotion of drugs and medical devices for unapproved (or off-label) uses
Fraudulently increasing the price Medicare or a government-sponsored health care plan pays for patient care
Inflation of prices on government contracts
Supplying the government with defective parts
Failure to comply with a government contract
Lack of quality control, or failure to properly test for defects, by a contractor
Obtaining a government contract through bid-rigging
Tax-evasion schemes, misrepresentation of income or unlawful use of foreign tax credits.
Various forms of securities and commodities trading fraud, including violations of the Foreign Corrupt Practices Act, market manipulation and Ponzi schemes
Front-running, where a trader is aware of pending 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 embezzlement from investors
Pump-and-dump schemes and stock manipulation, including false statements regarding a public company’s financial reports and lying to corporate auditors
Insider trading

Five things every whistleblower should know »

BEWARE OF REPORTING FRAUD TO YOUR EMPLOYER

Increasingly, corporations have developed internal “whistleblower” protocols, creating a perceived safe space for employees to point the finger at fraud. All too often, however, these internal channels fail whistleblowers, leaving them with no legal protection against retaliation and no chance of any recompense for putting their jobs on the line.

This dynamic makes properly reported fraud all the more important to stopping corporate crimes and protecting a whistleblower. It’s key to be smart about how you blow the whistle. Internal reporting through company-established “whistleblower” protocols can have dire consequences. Before reporting on something within your company or organization, it’s best to speak with experienced whistleblower counsel at a law firm with the depth of experience under the several whistleblower programs and knowledge of the varied retaliation protection laws of the False Claims Act and the SEC , CFTC and IRS whistleblower programs.

Learn more about protections for False Claims Act whistleblower »

Find out what protections are available for CFTC whistleblowers »

HAGENS BERMAN REPRESENTS WHISTLEBLOWERS

Hagens Berman’s team of whistleblower attorneys, led by Managing Partner Steve Berman and Head of Whistleblower Practice Shayne Stevenson, has successfully represented whistleblowers under the federal False Claims Act and similar state laws. Hagens Berman also has proven expertise and success in the area of financial fraud and has become one of the top SEC and CFTC whistleblower practices for the past decade, earning their clients several awards (including maximum awards) over the past several years and including 2021.

Unlike most whistleblower practices, which lack the track-record, expertise, and resources to litigate whistleblower claims against some of America's biggest corporations, Hagens Berman has a record of success that includes some of the largest settlements in legal history.

HOW TO BECOME A WHISTLEBLOWER

If you have knowledge of an act of fraud or would like to discuss becoming a whistleblower and find out more about your legal rights and protections, contact our whistleblower team at [email protected] or by filling out the secure form on this page.