When someone defrauds the government, there are incentives for whistleblowers to report the behavior. According to a recent article in the Wall Street Journal, there is a long history of allowing whistleblowers to benefit from reporting wrongdoing. The U.S. False Claims Act was enacted in 1863 to penalize individuals and companies defrauding government programs. In 1986, Congress made it easier for people to sue under the False Claims Act and in 2009 even more incentives were added for whistleblowers.
The incentives have worked and with the help of a whistleblower attorney in Texas, many people now help the government fight fraud and recover millions in taxpayer funds that were misspent. While benefiting the government, whistleblowers can also help themselves. In fact, the Wall Street Journal profiled one man who had filed multiple lawsuits under the False Claims Act, which allowed him to personally obtain more than $38 million.
Whistleblowers May Reap Financial Benefits
A 65-year-old internist filed 12 separate lawsuits over the past two decades accusing health care companies of defrauding Medicare and other taxpayer-funded programs. Five of the 12 lawsuits helped the government to recover hundreds of millions of dollars in misspent funds. The doctor was entitled to a portion of the money he helped the government recover.
Much of the $38 million came from a 2008 case in which allegations were made that Merck overcharged Medicaid for Pepcid. He was also compensated as part of a lawsuit in which the government recovered $187 million; for that suit, he received a letter of praise from a federal prosecutor's office.
While not every lawsuit he has filed has been successful, this doctor's story is a classic example of how the False Claims Act can benefit both people who help fight fraud as well as the government. Identifying corruption and wrongdoing among the many companies doing business with the federal government can be an insurmountable task, especially with limited government funds to devote to investigation. When insiders come forward and take action, taxpayers can benefit and fraud and waste in government programs can be eliminated so the programs can work more effectively.
A civil action under the False Claims Act is known as a qui tam lawsuit. The Justice Department can join a suit if it believes the case is worthy, and the Department of Justice will then take over the case. Of the cases that the Justice Department joined between 1987 and 2010 that had outcomes, 95 percent resulted in settlements by 2010. Plaintiffs can also pursue lawsuits even if the justice department does not join in, but these cases are not successful as frequently.
In the five years from 2009 to 2013, annual filings of lawsuits under the False Claims Act nearly doubled. By September of 2013, there were 753 claims filed by whistleblowers coming forward with evidence of companies that had done wrong. Those who take action are entitled to receive up to 30 percent of the money that the government recovers, minus lawyers' fees. The government receives the rest of the money, which is often totaling in the millions.
Contact a whistleblower attorney if you believe you have evidence of fraud. Call Brewer & Prichard P.C. today at 800-445-8710 to schedule a consultation.