Government rewards for reporting fraud are available to any corporate officer or executive (i.e., CEO, CFO, COO, CIO, CMO, President, Director, Vice-President, Chairman) or manager who reports fraud against the government
This article addresses the availability of whistleblower rewards to corporate officers, executives or managers for reporting fraud against the government, such as Medicare fraud or military fraud. It also addresses the special issues, concerns and pitfalls to avoid when a company executive considers becoming a whistleblower.
Fraud occurs more frequently than you think!
As a corporate officer, executive or manager, you take pride in your job and your company. But what happens when you discover that your company is cheating the government? The reality is that this occurs all too frequently. In fact, ten percent (10%) of all government contract billings are tainted by fraud. At times you can prevent or put an end to the fraud, but at other times it is out of your control. This article outlines your option of reporting fraud to the government and receiving a reward in the process.
The DOJ Whistleblower Reward Program
Under the False Claims Act, the Department of Justice (DOJ) pays rewards of up to 30% of the funds it recovers from a company that submitted false or fraudulent billings. This includes reporting fraud under any of the more than 20 federal programs, such as Medicare or military fraud.
To be eligible, a whistleblower must hire an attorney and file a complaint against the company. The case is initially filed under seal in order to give the government time to investigate the allegations without tipping off the defendant, but eventually it will be unsealed. The government has a choice of taking over the case itself or allowing the whistleblower’s attorney to proceed itself to prove the fraud and recover back the illegal proceeds. The government pays the whistleblower a portion of the amount recovered, consisting of between 15% and 25% in cases DOJ take over and 25% to 30% if the whistleblower’s attorney takes the lead. In short, if the case settles for $100 million, the whistleblower reward would be at least $15 million (15%).
Corporate officers and executives are eligible for whistleblower rewards
The False Claims Act does not restrict who can be a whistleblower or receive a reward. That means that any employee, manager, or corporate officer or executive can be a whistleblower, including CEO, CFO, COO, CIO, CMO, President, Director, Vice-President, or Chairman.
In short, managers and executive officers are eligible for sizable rewards for reporting fraud. For instance, Mr. Keeth, the Executive Vice President of United Technologies Corp. reported that his company was overbilling the government for work on helicopter. DOJ settled the case for $150 million and gave Mr. Keeth a whistleblower reward of $22,500,000. Another example includes John Slowik, was a Chief Compliance Officer (CCO) for Olympus Corporation of the Americas, the largest endoscope distributor in the country, who received a reward of $51 million for reporting that his company was paying kickbacks to hospitals.
That does not mean that there are no risks or issues to consider. The next sections address issues to consider before blowing the whistle.
Issues for managers or corporate executives
There are many issues for managers or company officers to consider and pitfalls to avoid. Here are the most common four issues. First, are you personally liable? Second, does your employment contract legally prohibit you from reporting fraud? Third, what information can you disclose? Fourth, how to get help from an experienced attorney in making the decision?
Personal Liability?
It goes without saying that if you planned or initiated the fraud, you could face criminal charges as well as be personally responsible for paying the funds back. On the other hand, courts have held that you must be more than be a corporate executive; you must have been personal involvement in the fraud. If you have clean hands, you are eligible for a reward. (As explained in more detail below, you should speak to an attorney experienced with False Claims Act reward cases and assess your personal risk as part of the process of contemplating a reward.)
Confidentiality agreements in contracts?
Most company managers, officers or executives have confidentiality agreements that prohibit an employee from disclosing information to third parties. However, there is generally a public policy exception that still allows employees to report fraud to their attorney and to the government. In fact, both the Securities and Exchange Commission and Congress recently passed laws prohibiting companies from curtailing employees from reporting fraud to the government. The SEC has been actively sanctioning companies that include certain language in employment agreements that prohibit reporting fraud. Therefore, even if you signed an employment agreement with language that suggests that you cannot report fraud, chances are it may be invalid. (You should disclose this to your attorney and get their advice.)
Privileged information?
Employees should not disclose privileged information to the government. However, not all information is considered privileged in terms of what can be disclosed to the government. For instance, HIPAA (The Health Insurance Portability and Accountability Act of 1996) generally prohibits disclosing personal information about medical patients to third parties. However, HIPAA has an express exception that allows employees to share this information with their attorney and to the government when reporting fraud. That means you can show patient files to your attorney or the government as part of the process of thinking about reporting Medicare fraud to the government. But it does not mean you can share it with the media.
The bigger issue is attorney client privilege. That is something that you should not disclose to anyone. In other words, if you have a legal memo from corporate counsel providing legal advice on an issue, you should not give it to your attorney or the government. You should talk to your attorney before turning over copies of attorney client communications to anyone.
Report fraud to your attorney and the government
Because of the unique risks to corporate executives for reporting fraud and filing for a reward, you should carefully select your False Claims Act attorney. The good news is that you can contact an attorney in confidence prior to deciding whether to report fraud. Even before you sign a representation agreement with an attorney, by law and legal ethics, your communications with an attorney while in the process of hiring an attorney are protected by the attorney client privilege. That means that your attorney will keep your information confidential and will not disclose it to others without your express approval, even if you decide not to hire that law firm.
How to ask The Hesch Firm to become your attorney
Mr. Hesch would be pleased to review in complete confidence your potential case of fraud against the government. You can read his extensive experience as an attorney working for the Civil Fraud Section of the U.S. Department of Justice (DOJ) in the reward office and on False Claims Act cases, together with his biography and his personal convictions on this website. Not only has Mr. Hesch worked for over 15 years in the DOJ office that pays whistleblower rewards, but for the past 10 years he has represented clients and helped them decide whether to report their company for committing fraud, including CEO’s, auditors, managers, and other executive officers. Mr. Hesch has also written a book for whistleblowers considering filing reward applications.
Find out if Mr. Hesch (and the team of attorneys working with him) is the right False Claims Act whistleblower firm for you.
See the link at the bottom of this website page below “Do I have a case” to have Mr. Hesch review your potential whistleblower reward case and may become your attorney to help you decide whether to report fraud and file for a whistleblower reward. You may also send Mr. Hesch an email to set up an interview. His email is Joel at HowToReportFraud.com
(Disclaimer: This article is for information only and should not be viewed as legal advice. Each case is unique and you should speak to an experienced False Claims Act attorney about your situation.)
Government rewards for reporting fraud are available to any corporate executive (i.e., CEO, CFO, COO, CIO, CMO, President, Director, Vice-President, Chairman) who reports fraud against the government. Find out if you are eligible.