Blowing the Whistle on Fraud
Whistleblowers are an important part of the government’s fight against corporate corruption, especially company insiders who have access to information and analysis that may not be widely available. In light of the economic recession and massive corporate frauds rocking entire industries, federal and state government agencies have created lucrative programs to reward whistleblowers who come forward with valuable information. Whistleblowers are most commonly inside employees, but competitors may also have valuable information that can lead to a whistleblower action.
While whistleblowers report corporate fraud in all industries, whistleblower actions are most common in the areas of:
- Health care and pharmaceuticals
- National defense contracting
- Banking and mortgage
Within these and other industries, there are many varieties of corporate fraud that federal and state government are extremely interested in learning about from corporate insiders and other people with knowledge:
- False or exaggerated billing or billing estimates made to government agencies or contractors who in turn bill the government;
- Underpayment of taxes as a result of misclassification of employees, mischaracterization of income, deceptive calculations of assets or losses, or any other fraudulent or false reporting;
- Insider trading;
- False corporate filings or records that contained artificially inflated income, undisclosed risks or losses, or any other false or deceptive information;
- False or deceptive statements or reports to government agencies made in order to receive government contracts or other monies or to avoid duties or other charges;
- Bribery of foreign officials;
- Fraud related to FDA regulation of pharmaceuticals including promotion of off-label drug use (misbranding), kickbacks and other improper inducements to physicians, alteration of drugs or medical products, submission of false information to the FDA and inadequate testing of drug safety;
- False certifications that products meet government specifications or guidelines;
- Any false or deceptive reports or filings that may endanger people, property or the environment.
The government recognizes that corporate insiders have the most to lose when reporting corporate fraud, and agencies work hard to ensure anonymity throughout the whistleblowing process, including after payment is made. However, in certain instances the government or the Court may be required to disclose a whistleblower’s identity.
If a whistleblower meets certain requirements, he or she may be entitled to up to 30% of the money recovered by the government based on the whistleblower’s information. The more specific and more timely a whistleblower makes a claim, the higher the likely recovery.
The key to successful recovery for information regarding corporate fraud is convincing the government to join, or intervene in, a whistleblower action. For this reason whistleblowers are strongly encouraged to seek out an attorney to assist them in bringing whistleblower claims. Attorneys can gather the most relevant information, create a persuasive narrative of corporate fraud causing injury to the government and citizens, submit information to the correct agencies and communicate with government attorneys. Whistleblowers should act quickly, since different laws pertinent to whistleblower cases have different limitations periods.