Whistleblower Lawyer

A whistleblower is anyone who reports illegal or unethical activity, to prevent wrongdoing. Whistleblower law seeks to help provide whistleblowers with rights. These usually come in the form of rights to sue for retaliation, or the right to a reward for reporting wrongdoing.

It is important to work with a skilled whistleblower lawyer when considering whether to blow the whistle. There are many complex aspects of these cases that are important to keep in mind and many steps to take that an experienced lawyer can help with.

Types of Whistleblower Cases

Whistleblower cases can be very large under any of the whistleblower reward laws. For example, tax fraud can involve a great deal of money and government contracting is be definition a huge business. The large amounts involved should be kept in perspective. Whistleblowers may be entitled to awards that are a percentage of these large amounts, but can take years to collect, and many cases fail for reasons that may not be apparent initially. Still, the purpose of these awards is clear. These laws are designed to encourage whistleblowers to provide information that is not generally in the public domain to the government.

Even when there has been a public disclosure of the allegations, Whistleblowers may be able to establish themselves as entitled to an award. Under the False Claims Act to do so requires that the whistleblower be an original source of information. There are requirements for original information under the IRS and SEC regulations as well. The False Claims Act now includes a provision allowing the government to effectively waive the public disclosure bar.

Modern False Claims Act

The modern version of the Federal False Claims Act was enacted in 1986 after it was amended out of practical use for many years. There is now a fairly long history of successful False Claims Act cases that provided awards to whistleblowers.

The next major laws that were enacted to create whistleblower rewards are the IRS whistleblower program and the IRS provision that one can report fraud to the IRS to affirm and attempt to collect an award if the IRS acts on that information and collects money. The involved parties do not go to court under these laws, as there is no Qui Tam aspect to them. The laws do, however, allow people to report fraud and obtain an award. The provision of the IRS whistleblower law under which most people would file now requires a minimum of $2 million in controversy in order for the IRS to investigate; a substantial amount of money should be at stake to substantiate whistleblower claims.

Motivation

IRS and SEC whistleblower regulations rules were designed because Congress created laws to allow for whistleblowers to come forward with new information and collect an award. So the IRS and the SEC created procedures to make that possible. While a whistleblower can file a case under certain circumstances when there is public information about that case, as a general rule under whistleblower law, the more new information the plaintiff brings to the government, the stronger their position.

It is important for any whistleblower to be able to state the source of their information to be able to demonstrate that their information is true and to expect the information and their position to be scrutinized by the government. The government takes reports of fraud on the False Claim Act very seriously and the Security and Exchange Commission and the IRS investigate many claims filed with those agencies. What constitutes information that should be used in these investigations is also complicated as there may be privileged material, for example, that should not be used. A whistleblower attorney can help their client determine necessary information.

Retaliation

Whistleblower laws include a variety of specific regulations that provide different rights to whistleblowers. Whistleblower retaliation is unfortunately common. Most of the major whistleblower laws including whistleblower award laws include anti-retaliation provisions.

It is important to know that anti-retaliation provisions generally provide a basis for individuals to sue along with strong rights to damages, but they do not protect from retaliation occurring in the first place.

All of the major whistleblower award laws now have anti-retaliation provisions. This is a relatively new development because the IRS whistleblower law has only recently instituted an anti-retaliation provision for people who wish to report tax fraud. Until recently, that was not the case; it was relatively unusual for a whistleblower to experience any difficulty for reporting tax fraud directly to the IRS because the IRS tends to treat reports under its IRS whistleblower program as extremely confidential.

Establishing an anti-retaliation provision is nevertheless a terrific advancement for this area of law. There are anti-retaliation provisions in the Federal False Claims Act, State False Claims Act, the Commodity Futures Trading Commission’s whistleblower program, and the Security Exchange Commission’s whistleblower programs. While these laws have been enacted with some measure of anti-retaliation action attached to them, they are not perfect, and they do not prevent all retaliations; however, they do provide a way for whistleblowers to recover if they experience retaliation, and they deter retaliation by putting potential retaliators on notice that they can be sued for it.

Anti-retaliation provisions work in many of the same ways that workplace actions work. Whistleblowers can sue for lost wages and even special damages, depending on the law. The few whistleblower reward laws that are in existence are special because they allow whistleblowers with valuable information to be awarded for that information.

Reward Laws

Whistleblower reward laws, in addition to providing rights for individuals to sue and protect themselves, also give the individual an opportunity to obtain a reward if their report results in the government collecting any funds.

The IRS has a whistleblower reward law. The office of the whistleblower for the Internal Revenue Service allows individuals to report tax fraud. Similarly, the Securities and Exchange Commission and the Commodity Futures Trading Commission have whistleblower programs. The parent of these laws is the Federal False Claims Act, which allows an individual to sue on behalf of the federal government and obtain an award. There are False Claims Acts, which were modeled after the Federal False Claims Act and allow individuals to sue, in approximately 30 states, several cities and counties, and in a growing number of jurisdictions around the country.

For example, Massachusetts has the so-called Qui Tam law, which gives the end individual a right to sue in court. Such laws can be much more complicated in terms of the procedures that whistleblowers must follow, but they tend to be the most successful of whistleblower award laws because they allow whistleblowers to file a case directly in court. At that point, state agencies or the federal government should investigate the whistleblower’s allegations, since the case will be presented to a judge in court. This law’s track record is perhaps stronger than other whistleblower reward laws, but the law itself is also older than many other similar laws.

It is important to understand that the IRS whistleblower law and the IRS whistleblower action are more formalized than other whistleblower laws. One must sign a Form 211 underpayments and penalties of perjury, which is considered a more formal way to report fraud to the IRS.

The IRS has been extremely careful to protect whistleblowers’ identities. Even if the IRS does not pursue a case, it is extremely unlikely that anyone would discover the whistleblower’s identity, as if there was no public court action or filing. If the IRS pursues a case, the whistleblower award may become known to the defendants at some point because of how unlikely it might have been for anyone else to have known about the particular tax fraud that the whistleblower reported to the IRS.

At that point, the whistleblower may be in a position to collect a major award. Similarly, the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) whistleblower programs were enacted later than the IRS law as part of the Dodd-Frank reforms. They became brand new whistleblower laws almost overnight, and allow whistleblowers to file a tip with both agencies and to attempt to obtain an award if either agency pursues the claim.

If the IRS collects anything based on the original information provided by the whistleblower, the whistleblower may be entitled to an award of 15% to 30% of that amount, making awards potentially lucrative depending on what the IRS collects and determines the award to be. The IRS can provide a discretionary amount if they so choose, but for practical purposes, if there is not at least $2 million at stake, they may not pursue the whistleblower’s claim; whether or not the whistleblower will be awarded is often left to the discretion of the IRS.

SEC and CFTC Rewards

The SEC and the CFTC whistleblower awards are often considered to be more whistleblower-friendly than many other such laws, as these awards contain additional, lesser-known provisions that can protect whistleblowers. Both the CFTC and the SEC utilize a procedure in an effort to keep the name of the whistleblower anonymous, which is somewhat unusual. The procedure has been established to protect whistleblowers’ identities to the fullest extent under these laws; however, if the SEC prosecutes an action and needs to call the whistleblower as a witness, the whistleblower may have to be identified to the defendants because the whistleblower would then be in a position to collect an award.

The SEC has been able to settle cases, obtain results, and award whistleblowers anonymously, even going so far as to stagger the actions that led to the collected amount and to announce that an anonymous award was granted so that people cannot move those two actions up. They have protected whistleblowers from being exposed to their procedures, and legal counsel is required t if a whistleblower intends to file a case under either laws, remain anonymous, and collect an award. There are many reasons why one should have legal counsel when entering such complicated transactions, but the SEC and CFTC procedures for filing a tip, remaining anonymous, and attempting to collect an award require counsel.

The award amounts under these two laws vary from 10% to 30% depending on what the government collects. These laws gaining notoriety in terms of the amount of information being provided to these agencies. Whistleblowers are eligible for awards in the event that the CFTC or the SEC collects a million dollars or more and posts a covert action on their website. Once a covert action has been posted, an individual can enter a claim stating that it was their inspection that led to the award. The anonymity of reporting with an actual procedure to make it possible allows whistleblowers to work within the law and with agencies and still succeed.

Pursuing a Claim

The IRS whistleblower law does not allow an individual to pursue such a case on their own, Instead, whistleblowers file relevant information under pain and penalty of perjury with a form provided by the IRS (Form 211) and any relevant information. The IRS is responsible to pursue the claim and should they collect funds the whistleblower would be entitled to an award. Since the False Claims Act specifically excludes cases filed to obtain tax funds, the IRS whistleblower provision is the manner in which tax fraud cases may be pursued at the federal level.

The type of information that whistleblowers can bring to the SEC or the CFTC and still be eligible to collect an award has also been defined. Both the Commodity Futures Trading Commission and the Securities and Exchange Commission allow whistleblowers to file a tip based on original analysis. A whistleblower’s analysis of information, even if it might already be public, may still count under these laws as original information that could qualify somebody to bring an award, depending on the analysis and the information.

The original analysis should be something that no one else has thought of before and that enables the SEC to prosecute a crime. An original analysis is not something that is easily brought to a case under other whistleblower award laws, but these two laws allow it, which is both fascinating and significant.

The CFTC has not pursued these two laws with the vigor that they perhaps could have, considering that whistleblowers could anonymously report original analysis and potentially claim an award. Their names will not become public unless there is an award, but even then, the names might not be disclosed.

The SEC has also created regulations that make it extremely difficult for a whistleblower to lose their right to collect an award or have their rights to report to the SEC alienated, meaning SEC whistleblower awards cannot be waived ordinarily in an employment dispute action.

Necessary Requirements

These reward laws now include a provision under which the IRS must provide a share of funds collected as a result of receiving information from Whistleblowers To obtain an award under Internal Revenue Code (IRC) 7623(b), whistleblowers must provide information leading to an IRS recovery involving a minimum of $2 million in controversy.

There are many different requirements to filing with each of these offices and they cover conduct and claims which may be different but the same illegal conduct may violate each of these laws or only one of these laws. It is important to review their requirements carefully with a whistleblower lawyer before pursuing an action under any whistleblower law.

The whistleblower must approach the government voluntarily under SEC, CFTC, or IRS whistleblower laws, and they must never have been convicted of a crime related to the information they are bringing to the SEC or the CFTC in order to qualify for an award; however, if they were involved in planning and initiating the fraud, they are likely to encounter a legal issue under the Federal False Claims Act.

If a whistleblower works for a company committing fraud, somebody ordered them to carry out what they did, but they come to the government voluntarily, they will likely be in a position to collect an award, assuming that the government collects some money under these laws.

These laws were established to ensure that powerful information reaches the government, which may be in a position to prosecute the fraudsters. The more it can prosecute, the more it can collect, increasing the likelihood that a whistleblower will collect an award.

Developing a Rapport With a Lawyer

It is important that whistleblowers develop a rapport with their lawyers because of how difficult blowing the whistle can be, and because whistleblower cases can take a great deal of time., Usually, the whistleblower is dependent upon the government agency corroborating the allegations to have a chance at success with the case. This can take some time. In many cases the only person the whistleblower can confide in about the allegations is their attorney. Contact a whistleblower lawyer who can advocate for you.