Whistleblower Lawyer

A whistleblower is anyone who reports illegal or unethical activity to prevent wrongdoing. Whistleblower provides whistleblowers with rights. These rights can include the right 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 and how to blow the whistle. There are many complicated aspects of these cases that are important to consider and many steps to take that an experienced lawyer can help explain.

Types of Whistleblower Cases

Whistleblower cases can be large and important under any of the whistleblower reward laws. For example, tax fraud can involve a great deal of money and government contracting is almost by definition big 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 it can take years to collect, and many other 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 whistleblower regulations as well. The False Claims Act now includes a provision allowing the government effectively to waive the public disclosure bar.

Modern False Claims Act

The modern version of the Federal False Claims Act was enacted in 1986 after it had been 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 lawe enacted to create whistleblower rewards are the IRS whistleblower law then came the SEC and CFTC Whistleblower programs which were enacted under the Dodd-Frank financial reforms. Under these laws one can report fraud to the IRS, SEC or CFTC  and attempt to collect an award if the government acts on that information and collects money. The whistleblower does not have a right to go to Court these laws, as there is no Qui Tam provision that is there is no private right of action under 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 requires a minimum of $2 million in controversy in order for the IRS to be required to provide an award.

Motivation

IRS and SEC whistleblower regulations were designed because Congress created laws to encourager whistleblowers to come forward with new information. So the IRS and the SEC created procedures to make clear how whistleblowers can do so. As a general rule under, the more the whistleblower can demonstrate the information provided to the government is new the stronger their position may be in attempting to collect an award.

It can be important for any whistleblower to be able to state the source of their information. The government takes reports of fraud under the False Claim Act very seriously and the Securities and Exchange Commission and the IRS investigate many claims filed with those agencies. A whistleblower attorney can help a client determine what information may be most helpful to a government agency charged with investigating fraudulent activity.

Retaliation

Whistleblower laws include a variety of specific regulations that provide different rights to whistleblowers. 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. They do provide for extensive rights to collect under such provisions including often two times damages for lost pay, reinstatement damages and attorneys fees.

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 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 Acts, the Commodity Futures Trading Commission’s whistleblower program, and the Securities and 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 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 State 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 a Qui Tam law, which gives the end individual a right to sue in court for fraud committed against the Commonwealth of Massachusetts and its cities and towns.. Qui Tam laws, the laws such as the Massachusetts and Federal False Claims Acts can be 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. The Federal False Claims Act’s track record is perhaps stronger than other whistleblower reward laws, but the law itself is also older than many other similar laws.

Meanwhile, the IRS whistleblower law has  an usual procedure as compared to other other whistleblower laws. To file a claim, one must sign an IRS Form 211 under the pain and penalties of perjury, a somewhat more formal requirement than with other government agencies even though it is of course illegal to lie to any government agency outright..

The IRS keeps information about taxes confidential and as a result has also been careful to protect whistleblowers’ identities. If the IRS does not pursue a case, it is unlikely that anyone would discover the whistleblower’s identity, there would be no public court action or filing. If the IRS pursues a case, the whistleblower may become known to the defendants. However, the whistleblower of course at that point may become eligible for an award..

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 allow whistleblowers to file a tip with either agency and to attempt to obtain an award if either agency pursues the claim.  They also allow whistleblowers to submit information through counsel on an anonymous basis.

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 award programs not only have rewarded people who provide original information but also have worked to protect whistleblowers.. Both the CFTC and the SEC follow procedures to try to protect the identity of the whistleblower. It is possible to file a tip and even apply for an award on an anonymous basis with these programs. 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.

Still the SEC has been able to settle cases, obtain results, and award whistleblowers anonymously, even going so far as to stagger the announcement of the actions that led to the collected amount and the announcement that an anonymous award was granted so that people cannot figure out which action led to what award.. They have fought to say that whistleblowers can not even waive their right to collect an award as a result of a settlement in an employment action as well. There are always many reasons why anyone should obtain legal counsel when entering into complicated whistleblower activity but, in addition, the SEC and CFTC procedures for filing a tip, remaining anonymous, and attempting to collect an award require such counsel.

The award amounts under these two laws range from 10% to 30% of the collected sanctions depending on factors the agencies use to determine what percentage to award. Whistleblowers are eligible for awards in the event that the CFTC or the SEC collects a million dollars or more and posts a covered action on their website. Once a covered action has been posted, an individual can enter a claim stating that it was their information that led to the award. The anonymity of reporting with an actual procedure to make it possible for whistleblowers to work within the law and with agencies and still succeed makes these programs especially helpful to those who want to report wrongdoing.

Pursuing a Claim

The IRS whistleblower law does not allow an individual to file a case anonymously. Instead, whistleblowers file relevant information signing a  form provided by the IRS (Form 211) and any relevant information. The IRS requires this form to be signed by the Whistleblower under the pains and penalties of perjury. The IRS is responsible to pursue the claim and should they collect funds the whistleblower would be entitled to an award. Since the Federal False Claims Act specifically excludes cases filed under that law to apply to fraud involving tax fuds, , the IRS whistleblower program is the way 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 underlying information might already be public, may still count under these laws as original information that could qualify somebody to bring an award.

The original analysis should be something that no one else has published or presented to the governement 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.

CFTC and SEC whistleblowers should take advantage of these programs to file more tips and apply for more awards, especially considering that whistleblowers could anonymously report original analysis and potentially claim an award. Their names will not likely 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 the right to collect an award or interfere with the right to report fraud to the SEC. SEC whistleblower awards cannot be waived ordinarily in an employment dispute.

Necessary Requirements

Whistleblower reward laws now include a program under which the IRS must provide a share of funds collected as a result of receiving information. To obtain an award under Internal Revenue Code (IRC) 7623(b), a whistleblower must provide information leading to an IRS recovery involving a minimum of $2 million in controversy. The IRS at its discretion may provide awards for cases involving less money in controversy. The SEC and CFTC provide awards when there has been collected sanctions under their programs of $1 Million or more.

There are many different requirements to filing with each of these offices and they cover conduct and claims which may be different. Yet the underlying facts may be similar and a fraudulent scheme may involved illegal conduct that violates one or more of these sets of laws. It is important to review their requirements carefully with a whistleblower lawyer before pursuing an action under any whistleblower law, but yes it can be possible to file a matter involving multiple whistleblower programs.

The whistleblower must provide information to the government voluntarily under SEC, CFTC, or IRS whistleblower laws, in order to qualify for an award. Under the Federal False Claims Act their right to an award can be affected by whether or not a whistleblower planned and initiated the fraud. However, If a whistleblower works for a company committing fraud, and somebody ordered them to carry out what they did, but they come to the government voluntarily, they will most 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, and to help prosecute the fraudsters.

Developing a Rapport With a Lawyer

Whistleblower law is complex and most cases take years to develop. As a result it is especially important that whistleblowers develop a rapport with their lawyers. Often the lawyer may bethe only person the whistleblower can speak with because of the attempt to file an SEC case on an anonymous basis or because they have filed a False Claims Case under seal. In any event learning about the process from an experienced counsel and working with them to develop the case is advised. Contact a whistleblower lawyer who can advocate for you.