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Whistleblower Claims Could Rise Significantly
The recently enacted health care reform legislation makes it easier for whistleblowers to help stop fraud against the federal government by bringing a qui tam action under the False Claims Act.
May 24, 2010 /Human Resources PR News/ -- Whistleblower Claims Could Rise Significantly
Earlier this year, while Congress debated the Patient Protection and Affordable Care Act, media attention focused on contentious political charges and countercharges over health-related provisions of the bill. Overlooked in the political drama was an obscure section of the legislation that might well enable more whistleblowers to come forward to stop companies and individuals from defrauding the government.
What is Qui Tam?
The Patient Protection and Affordable Care Act (PPACA) contains important changes to the False Claims Act. These provisions make it easier for someone to bring a qui tam claim, blowing the whistle on a corporation or person defrauding the government.
A qui tam action is brought by an informer or whistleblower under the False Claims Act. The qui tam civil action seeks a recoverable penalty in which a portion goes to the whistleblower and the remainder goes to the government. A successful qui tam action results in compensation for both the person who files the action and the government.
Last year, a Gulf War veteran and former Pfizer sales representative earned $51.5 million as a result of a whistleblower lawsuit against the pharmaceutical giant. In addition, Pfizer agreed to $2.3 billion in civil and criminal penalties for illegally promoting several of its products.
Prior to the signing of PPACA in March, qui tam actions could not be based upon public information unless the whistleblower was the original source of the information. The recent change in law enables the Department of Justice to stop a defendant from getting a claim dismissed because it's based on publicly disclosed information.
This significant change means a person can file a qui tam claim based on second-hand information.
Further Expansion of Whistleblower Program?
While the changes under the PPACA are significant, the financial regulatory reform bill currently under consideration by the Senate may mean more securities-related whistleblower claims, too. Under current law, the Securities and Exchange Commission rewards whistleblowers who report instances of insider trading to the agency. Language in the current draft of the financial regulatory reform bill would expand the bounty program to allow the SEC to reward those who report violations of any securities law, including the Foreign Corrupt Practices Act.
While it remains uncertain whether Congress will pass the bill as written, this change could potentially lead to a steep increase in the number of securities-related federal whistleblower claims.
Examples of Actions Under the False Claims Act
Fraud against the government is widely acknowledged to cost taxpayers up to 10 percent of the annual federal budget. Those tax dollars go to companies and individuals engaging in some of the following:
-Overcharging for products or services
-Falsely claiming public benefits from programs such as Medicaid, Social Security and Medicare
-Falsification of invoices, loan documents and other financial data and documents
-Holding government property for the purpose of concealing it
-Fraudulently purchasing property from the government
-Tax fraud
Protecting Yourself and Taxpayers
If you work for a corporation or individual fraudulently conducting business with the government, you should contact a qui tam attorney who can assess the specifics of your case and advise you of your legal options, as well as available whistleblower protections and compensation.
Article provided by Begelman, Orlow & Melletz, Attorneys at Law
Visit us at www.begelmanorlow.com
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