Whistleblowers ferret out fraud, replenishing the tax pool

posted on:
January 26, 2016

author:
Archie Grubb

Benjamin Franklin once stated, “There is no kind of dishonesty into which otherwise good people more easily and frequently fall then that of defrauding the Government.” President Abraham Lincoln also held this awareness.

It was during the Civil War when President Lincoln ratified the False Claims Act (FCA), and it was during the Gettysburg Address that Lincoln proclaimed our government to be “… of the people, by the people, [and] for the people….” Citizens fund the tax pool, which is used to benefit the public through government programs. Therefore, when an organization or individual defrauds the government, they are stealing from the tax pool. When this occurs, taxpayer-funded programs no longer have the money needed to aid the public, resulting in the government raising taxes.

Individuals and companies defrauding the government led to the FCA being enacted more than 150 years ago, and, as stated by Assistant Attorney General Benjamin C. Mizer, “[t]he False Claims Act has again proven to be the government’s most effective civil tool to ferret out fraud and return billions to taxpayer-funded programs.”

The FCA is effective in ferreting out fraud because it allows private individuals to file lawsuits on behalf of the government when those individuals have knowledge of a person or company defrauding the government. These lawsuits are filed under the qui tam or whistleblower provision of the FCA. In Fiscal Year 2015 (FY2015), more than $2.8 billion was recovered from lawsuits related to the qui tam provision of the FCA.

The war on fraud is not fought with soldiers but with ordinary citizens, and the FCA provides the opportunity accompanied with incentives and protection for these citizens. The FCA offers the opportunity as an avenue for courageous men and women to do the right thing and blow the whistle on fraud. The FCA then continues to help the individual by providing protection from retaliation and by offering monetary incentives.

The protection provided by the FCA stems from the anti-retaliation provision, which protects the whistleblower from retaliation from her employer. These protections include (1) reinstatement of employment, with seniority, (2) twice the amount of back pay owed, (3) compensation for any special damages sustained as a result of retaliatory action, and (4) reasonable attorney fees and the cost of the litigation.

The FCA also offers monetary incentives for individuals to do the right thing and blow the whistle on fraud. These incentives include 15 to 30 percent of the damages recovered by the government. In FY2015, the government paid out $597 million to the individuals who exposed fraud by filing qui tam complaints.

As the government continues to combat fraud, ordinary citizens are becoming whistleblowers and are helping to recover and return billions of dollars to the tax pool. For example, there were 638 qui tam suits filed during FY2015. Citizens are becoming whistleblowers because citizens – not the government – are often uniquely positioned to expose fraud. A nurse is in a better position to detect and expose Medicare fraud. A mechanic is in a better position to detect and expose the company defrauding the government through national defense contracts.

When these individuals blow the whistle by filing a lawsuit under the qui tam provision of the FCA, these whistleblowers help the government (1) detect more fraud, (2) insure money intended for purposes such as health care or national defense is spent on furthering those purposes, and (3) deter other companies from committing the same fraud.

Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Andrew Brashier, Archie Grubb, Larry Golston, or Lance Gould.

Sources:
Abraham Lincoln Online
U.S. Department of Justice
31 U.S.C.A. §3730(h)

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