Wednesday, June 25, 2014

Intentional or Sustained Violations Make the Best Whistleblower Reward Claims


Several laws exist to empower the federal government to recover funds owed to it. These laws range from the well-known (the False Claims Act and the Dodd-Frank Act), to the obscure (the Financial Institutions Anti-Fraud Enforcement Act). Each law has specific requirements, but every one of them provides a reward to whistleblowers who alert the government to the wrongdoing.

Some of the laws -- the IRS whistleblower program being the foremost example -- cover violations whether they are intentional or not. A whistleblower can get a share of any qualifying underpayment regardless of whether the delinquent taxpayer intended to defraud the government or simply miscalculated.

This past fall, I had the opportunity to hear Stephen Whitlock, the director for the IRS’s whistleblower office, talk about what the government looks for in a successful whistleblower reward claim.  Mr. Whitlock clarified that, in practice, the government looks for intentional wrongdoers, not people who accidentally run afoul of the law.

Earlier this month, Assistant Attorney General Stuart Delery confirmed that point at the American Bar Association's 10th National Institute on the Civil False Claims Act and Qui Tam Enforcement. Mr. Delery touted the U.S. Department of Justice’s “renewed emphasis” on non-monetary settlements.

As explained by Mr. Delery, the Department of Justice has focused on remedies that will strengthen an offending company’s compliance and remediation in addition to recovering large monetary settlements. The agency has done this to ensure that companies do not become repeat offenders.

Mr. Delery’s statements confirm what Mr. Whitlock was saying this past year: the government will prioritize whistleblower claims that involve sustained, intentional, or reckless wrongdoing. A single violation is unlikely to get much attention.

Still, there are numerous factors that the government considers when deciding to take a whistleblower disclosure to the next level. If you know of fraudulent claims made to the government, or if you have suffered retaliation for identifying potential false claims, you should contact an experienced whistleblower attorney to understand your rights.

By Dallas Hammer

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