OMG – My Company is Cheating the Government – What Should I Do Now?

Anyone can be a whistleblower so long as he or she has insider knowledge about false claims made to the United States government and is not an active member of the military. Most whistleblowers never suspected that they would be reporting their employer for fraud. They are like you – a hardworking scientist, nurse, health care worker, physician, office manager, bookkeeper, CNA, test pilot, manufacturing technician, engineer – or anyone else who works for a company that provides products or services to the government (Department of Defense, Army, Navy, Air Force, Medicaid or Medicare or state government, county government or local government agency).

1305802_businesswoman_1Many whistleblowers have never been involved in the legal system before bringing a qui tam (federal false claim act) case. Although the law is complex, the basis is simple: It rewards those individuals who have evidence and personal knowledge about someone who gets more money than they are entitled from the government. This is called a False Claim Act or qui tam case. The falsification can involve many things. For example, it can include:

(1)     billing for products or services that are not provided;

(2)     billing for products or services that the law does not permit; or

(3)     billing for products or services that do not meet the government requirements.

It can also involve a company that fails to pay all that it owes to the government. This is a “reverse false claims act” case. An example would be a company that understates the value of goods imported from overseas in order to reduce the US Custom duties that must be paid. By falsifying import documentation the company pays less than they should for import duties, tariffs and penalties.

The federal law is the “False Claims Act” and it is found at 31 United States Code Section 3730 (31 U.S.C.A. §3730) and some related statutes. Many states have also enacted their own versions of False Claims Act laws and most have similar provisions or penalties.

Here’s an example of how a whistleblower is “born”:

After months of searching for a new job in the barely recovering economy, you land a great job. You are the new office manager for a small veteran-owned business. The company provides cables for government computers.

As you settle into the job you learn that the president of the company enters some of the accounts into the computer himself. This is unusual but not your concern. After a few months, you begin to wonder why the boss only enters data into the accounting computer on the one day of the week that the part time assistant is not scheduled to work. Out of curiosity, you check the data entered under the absent worker’s code. You learn that the boss has input billing statements for materials that were never delivered. All of the false billings are for government contracts. Immediately your Mother’s admonition “curiosity killed the cat” comes to mind and you decide to keep this knowledge to yourself.

A year later the boss is still improperly inputting data and you read about a qui tam (Federal False Claims Act) case where the whistleblower saved the government (and taxpayers) millions of dollars and received a large payment for his help. You wonder if you should report the false claims by your boss but you have no idea how to do it or if the case would be worth the risk. You are fearful (with good cause) that if the boss finds out that you discovered his fraud he will fire you immediately and you have a child to consider.

In the situation described above, the potential whistleblower would need to consider a few things:

Do I have evidence that I can show the government to prove what I am saying is true? Even if you know that something “wrong” is going on, that is not evidence. Hunches and suspicions may make for great T.V., but in reality only evidence can be relied upon to prove a case. Evidence can be documents proving the fraud, photographs, text messages, telephone messages, video tapes, computer data or other materials. If the fraud involved a defective product that is being sold to the government, a sample of the product would be evidence. So in the example above, if you can bring the billing documents, a list of the employee codes and pay or attendance records these would help prove your case. Did you complain to the boss about the billing in an email and did he email you back? If so, that may be evidence. Finally, do you have these items? Sometimes things kept at work disappear, so before bringing a claim you will want to have copies of the evidence.

Who else knows about the false claims? If more than one person knows about the fraud and the false claims being made, you will want to know their name and if possible some contact information. This is especially important if that person is no longer with the company. So in the example above, you may find out that your predecessor found out about the scheme by the boss and when he confronted the boss he was fired. That would be a very helpful witness for the government.

How much is the government’s loss? In some situations you cannot figure out how much the government has lost as a result of the false claims. But the lawyers for the government who handle these cases are so busy (particularly after the Sequester reduction in funding) that they only want to consider cases in the millions of dollars. So in the example above, if the company only provides a few thousand dollars of cables to the government each year, the case may not be of great interest to the government.

Do I go to the government without an experienced qui tam lawyer? If you know about fraud and false claims and you have the courage to report it, you should do so. But do you go on your own or wait to have a lawyer? In most instances it is not a priority of the government to look out for the whistleblower. They will take the evidence and your statement and thank you, but you may never hear anything again and almost certainly will not receive a reward. Having an experienced qui tam lawyer provides the best protection for several reasons. If the Federal (or State) False Claims act case is filed, it will most likely keep your involvement confidential for months if not years. Also, your interest in obtaining part of the moneys recovered by the government will be protected. You should know that in these types of cases, lawyers generally do not charge you anything unless there is a recovery from the wrongdoer. A lawyer can also help protect your rights should you be wrongfully terminated. Finally, many courts insist that only a lawyer can file a Federal False Claims Act case on your behalf.

 

 

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