Reporting progress payment fraud and obtain a whistleblower reward

If you report progress payment fraud against the federal government or a State entity you can get a significant monetary reward. But there are very specific rules and requirements you must follow when you report progress payment fraud or you won’t be eligible for a reward.

This article tells you how to get a reward for reporting progress payment fraud against the government.

Tips for how to report progress payment fraud

Below are the basics for how to apply for a reward and how to properly report progress payment fraud against the government.

First, you cannot simply tell a government official or call a hotline to report progress payment fraud. In other words, even if you report the progress payment fraud and the government uses your information to recover millions of dollars, you won’t be eligible simply by reporting the progress payment fraud. Rather, to get a reward for reporting progress payment fraud you must use an attorney to file a qui tam suit alleging the progress payment fraud being committed against the government. This may sound expensive, but lawyers handling whistleblower rewards for reporting progress payment fraud take cases on a contingency basis, which means they front the costs and receive a portion of any whistleblower reward.

Second, you must provide specific and detailed information about the progress payment fraud. The government turns down 75% of reward applications. Thus, it’s very important that you select an experienced attorney that knows how to present a progress payment fraud claim for a reward.

Examples of progress payment fraud

One defense contractor had a multi-million contract to build and maintain aircrafts. Due to the nature of the contract, the company was paid payments based upon its progress in completing the government contract. In essence, the contractor was getting paid in proportion to the progress or amount of work it performed. Each month it reported to the government the portion or percentage of completion and it received a corresponding progress payment. When a contractor lies about its progress in order to get paid quicker than it was entitled, it is called progress payment fraud.
The defense contractor settled with the government for alleged progress payment fraud by paying $5 million, which is approximately double the value of money being paid early, i.e. the amount of interest the funds could have earned if they had not been paid early.

In most government contracts to build large equipment, such as ships, planes or buildings, a contractor submits monthly progress reports. It is required to estimate the percentage of work completed, and then gets paid that percentage of the contract value. Progress payment fraud adds up quickly in large contracts.

What is different about progress payment fraud is that the government doesn’t pay more than it should, but instead it pays sooner than it should. For instance, a company may be only 20% done, but claims to be 30% done, in order to get paid quicker than it should. But, it is still progress payment fraud because the company lies about the amount or percentage of work done. Again, the government is harmed by the time value of money because the government could have kept the money in the bank earning interest.

How much reward for reporting progress payment fraud?

The size of any whistleblower reward for reporting progress payment fraud is determined by the size of the fraud. That’s because you receive a portion of the funds recovered by the government based on your allegations of progress payment fraud.

With respect to the example of a defense contractor paying $5 million to settle the progress payment fraud allegations, a whistleblower would be entitled to a reward of between 15% and 25% of that amount, or between $1.5 million and $2.5 million. The larger the fraud case, the larger the reward.

How to report progress payment fraud

Mr. Hesch is available to review your information and decide if you have the right kind of a progress payment fraud case that is eligible for a reward. The rest of this website provides more details how to report progress payment fraud and how to apply for a reward.

See the link below “Do I have a case” to have Mr. Hesch review your potential case for how to get a reward for reporting progress payment fraud against the government.

See the link below “Report Fraud” to learn more about how to get a reward for reporting progress payment fraud.