If you wait too long, you will not be entitled to a whistleblower reward for reporting fraud against the government. Each government whistleblower reward program has a specific statute of limitations that cuts off reward applications. For instance, the IRS reward program is generally three years (unless there is strong evidence of fraudulent intent), and the main U.S. Department of Justice whistleblower reward program generally has a six year statute of limitations (but in limited instances can go back as far as ten years).
It is important for a whistleblower, known as a relator, to come forward as soon as possible with a possible whistleblower reward application. The main program that pays rewards for reporting fraud against any government agency other than IRS tax fraud requires that your attorney file a qui tam complaint under the False Claims Act (FCA) to be eligible for a reward. Normally, claims for rewards under the FCA must be brought within six years of the time when the alleged fraudulent claims were submitted to the government. A recent decision in the Fourth Circuit, United States ex rel. Carter v. Halliburton Co., however, extends the time during which a relator may bring certain FCA claims, particularly those related to the fraudulent actions of government contractors in Iraq and other areas where the United States is at war.
In March 2013, the Fourth Circuit was asked to consider whether the Wartime Enforcement Fraud Act of 2008 tolled or extended the FCA’s six-year statute of limitations. In Carter, the court found the six-year statute of limitations for bringing a qui tam action to claim a whistleblower reward can be tolled or suspended for an additional five years by the Wartime Enforcement Fraud Act (“WEFA”) of 2008.
The relator in Carter brought an action alleging his employer, KBR, a contractor for the government in Iraq, defrauded the government by claiming to start a water purifying operation months before it actually began and further requiring employees to turn in time sheets showing twelve hours of work on water purifying operations, even if they had worked fewer, or no, hours on the operation. The case was ultimately dismissed by the district court as barred by the FCA’s six-year statute of limitations. The district court determined that WEFA did not toll the statute of limitations for claims made under the FCA.
The WEFA was passed in 2008 to suspend the applicable statute of limitations for five years for claims alleging fraud on the United States. It amended the Wartime Suspension of Limitations Act (“WSLA”) to specifically include civil offenses. The statute of limitations tolling provision in the WEFA is applicable when the United States is at war or Congress has authorized the use of armed forces and continues to be in effect until a termination of hostilities as declared by the President or Congress.
In Carter, the court considered whether the circumstances of the war in Iraq met the definition of “at war” required by the WEFA and WSLA to toll an action of fraud. The Fourth Circuit interpreted the plain language of the WSLA to find that the United States military actions in Iraq qualified as “at war” status and triggered the provisions of the WEFA and WSLA to toll an action of fraud. The court held that no formal declaration of war was required to invoke the tolling provisions and that Congressional authorization to the President to use force in Iraq met the qualifications to trigger an “at war” status. Further, the court stated that the “at war” status in Iraq was still continuing, as the WSLA language was plain and unambiguous in requiring the formalities in the WSLA be met before the United States is no longer considered at war, which has not occurred with regard to Iraq.
Thus, for Carter and others who discover the fraudulent actions of contractors in Iraq and other areas where the United States is engaged in war, the WEFA serves to suspend the normal six-year statute of limitations applicable to FCA actions and gives relators additional time to bring their claims.
Of course, not every court will adopt this extension of the statute of limitations, and you should get legal help or advice from an attorney with experience with whistleblower reward cases to determine if you are still eligible for a reward if you wait more than six years. In addition to the statute of limitations, your claim will also be barred if you wait too long because most reward programs only pay rewards to the first whistleblowers that properly files claim for a reward.
If you are a whistleblower and wonder whether you might be eligible for a whistleblower reward, you need to be mindful that you must hire an attorney (i.e. on a contingency basis) and actually file the reward application in a legal proceeding prior to the expiration of the statute of limitations (and before another whistleblower claims a reward). The good news is that you can ask an attorney experienced with filing reward applications to review your allegations in confidence and help you decide if you have the right type of case that may be eligible for a whistleblower reward and if the claim for a reward is timely. Your attorney will need to spend time evaluating the allegations and file the reward claim prior to the expiration of the statute of limitations. Therefore, don’t wait for three or six years, but act today by contacting a FCA qui tam attorney in confidence.