Federal, State, and Local Whistleblower Laws
The following statutes are the basis of virtually all whistleblower/qui tam actions:
- Federal False Claims Act
- State False Claims Acts
- Local Government False Claims Acts
- Whistleblower Programs by Various Federal Agencies (Internal Revenue Service, Commodity Futures Trading Commission, and Securities and Exchange Commission)
The Federal False Claims Act
On behalf of its clients, Berger Montague’s Whistleblower, Qui Tam & False Claims Act practice group utilizes the federal False Claims Act to seek legal redress against companies who have defrauded the federal government through any number of fraudulent schemes.
Successful whistleblower actions under the False Claims Act generally entitle the whistleblower to an award ranging between 15% and 30% of the Government’s overall recovery. Specifically, if the government decides to actively join the case based on the information provided by the whistleblower (known as a government intervention), the award is generally between 15% and 25% of the Government’s recovery. If the Government declines to intervene in the case and the whistleblower and his or her lawyers pursue the case without Government support, the award is generally between 25% and 30% of the Government’s recovery.
State False Claims Acts
29 states and the District of Columbia have enacted False Claims Acts. Although there are some differences among these laws, they are generally modeled after the federal False Claims Act, and they all have similar whistleblower award provisions. The key distinction is that the federal False Claims Act pertains to fraud upon the federal government, while the state laws pertain to fraud upon state governments.
Many (but not all) of the state statutes also cover fraud against local government entities in addition to state government entities.
One distinguishing feature in the New York statute provides that a whistleblower can pursue a qui tam action against a company for New York State tax fraud. Most False Claims Act statutes do not apply to tax fraud, which must be pursued under the IRS statute or is not able to be pursued if the fraud involves state or local taxes. This is an extremely helpful provision of the NY statute and can be utilized to recover substantial amounts of money damages.
Local Government False Claims Acts
Six local governments have enacted False Claims Acts, including Broward County (Florida), Chicago, Allegheny County (Pennsylvania), Miami-Dade County (Florida), New York City, and Philadelphia. In addition, some of the state False Claims Acts discussed above are applicable to all local government entities in the state.
The IRS Tax Fraud Program
Pursuant to the IRS Tax Fraud Program, a whistleblower who reports tax fraud committed against the federal government can receive between 15% and 30% of the amount recovered, which includes the aggregate of tax due, interest and penalties.
There are two IRS Whistleblower Office limitations to receiving whistleblower rewards. First, if the wrongdoer is a company, the amount recovered must be more than $2 million for the whistleblower to be entitled to an award. Second, if the wrongdoer is an individual, the person’s annual income must be more than $200,000.
The SEC/CFTC Whistleblower Programs
Pursuant to the Securities and Exchange Commission and Commodity Futures Trading Commission Programs, a whistleblower who reports a violation of the securities and/or commodities trading laws, such as insider trading, improper management of collateralized debt obligations, money laundering, or violations of the Foreign Corrupt Practices Act, can receive between 10% and 30% of any penalty paid by the wrongdoer to the government. The penalty amount must be more than $1 million for the whistleblower to be entitled to an award.
Contact a Whistleblower Lawyer
Do you need a whistleblower lawyer, or do you want to know more about qui tam law?
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- Use the contact form on this page
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Your information will remain confidential while we evaluate your potential claims and we will work with you to protect your rights.