Laws that Authorize Rewards to Whistleblowers

The federal government has enacted numerous laws to help disclose government fraud. Since the government can’t be everywhere every hour of the day, it relies on employees, contractors, and every-day citizens to report fraudulent acts that cost the government money. Samples of fraud include overbilling, billing for services that weren’t provided, improperly valuing assets, dishonesty when filing forms, and other improper acts.

To encourage people to step forward, the government offers a cash incentive in many types of cases. The incentive is typically a percentage of any recovery the government obtains. The key factors in most whistleblower disclosure cases are that the disclosure must generally be original (something the government isn’t already aware of). The case should lead to a judgment or settlement in which the defendant is required to reimburse the government for the ill-gotten gains and to pay fines and penalties.

The percentage of the recovery usually depends if the government does or doesn’t intervene in the case. If the government accepts the case, there’s a better chance of a recovery. For this reason, the percentage of payout is normally lower when the government intervenes than when the claimant proceeds on his/her own. An experienced whistleblower lawyer helps to persuade the government to intervene and represents the claimant directly when the government declines to intervene.

Some of the laws that authorize a whistleblower a percentage of the recovery include:

  • The False Claims Act. Claimants, called relators, who file “qui tam” actions that involve fraud related to government contracts or other specified frauds are entitled to a recovery. The percentage allowed is normally between 15-25% of the recovery.
  • The Internal Revenue Code. People who disclose underreporting of taxes are entitled to between 15-30% of the sum recovered including interest, penalties, and fines. If the total recovery is more than $2 million and other criteria are met, then the recovery is 15-30% provided that the individual who must pay has an annual gross income of more than $200,000. Claimants who believe their award is too low can appeal to the US Tax Court. Otherwise, the percentage paid is a maximum of 15% up to a maximum of $10 million. Claimants in this latter category can’t appeal or dispute the payment because awards for these amounts are discretionary.

There are many laws that protect whistleblowers and their claims. Experienced California whistleblower lawyers are familiar with the federal and state whistleblower laws. At Stephen Danz & Associates, we have been fighting for whistleblowers in court and with the government for decades. To learn if you have a whistleblower case, call (877) 789-9707 today. Se habla espanol.