The Pros of Whistleblowing
One of the most rewarding aspects of being a whistleblower is acting on behalf of the United States government in seeking to recover taxpayer dollars lost due to the fraud of unscrupulous individuals and corporations. Whistleblowers possess courage and integrity. When they see others engaged in misconduct, whistleblowers are willing to take risks to right those wrongs. Undertaking such an extraordinary endeavor can be extremely gratifying, particularly when a whistleblower’s claims are substantiated and lead to a recovery from the perpetrators of the fraud.
Apart from personal gratification, being a whistleblower has other benefits. In a qui tam action brought under the False Claims Act (FCA), an eligible whistleblower, known as a “relator,” is entitled to a percentage of the proceeds recovered from their lawsuit. A qui tam action is intended to encourage people to come forward when they have evidence of fraud and accept the risks involved with reporting that fraud.
A successful relator is generally eligible to receive between 15% and 30% of the recovered proceeds. The actual percentage awarded in a case is dependent on a number of factors, including whether the government intervenes in the action and the extent of the relator’s contributions to the investigation and prosecution of the action. According to the Department of Justice, which is responsible for recommending the award percentage to the court, the average relator’s share is approximately 17% based on a list of factors that are considered for increasing or decreasing the award percentage. Most state and municipal false claims acts contain similar, if not identical, provisions for the determination of the relator’s share.
Whistleblowers who submit claims through any of the federal agency whistleblower programs are likewise eligible to receive an award for providing information involving suspected violations of the law. These programs typically offer an award of between 15% and 30% of the recovered proceeds based on information that is attributable to the whistleblower. The final determination of an award percentage is typically dependent upon a number of factors including the whistleblower’s actual contribution to the case and timeliness of the whistleblower’s report of a violation.
Most whistleblower programs also consider factors that might reduce the whistleblower’s award percentage. Factors that could lead to a reduction include the whistleblower’s participation in the misconduct that led to the violation; substantial delays in reporting the violation; and interfering with the company’s internal compliance procedures.
The Cons of whistleblowing
Filing a qui tam or whistleblower suit is not for the faint of heart. Apart from the stress and anxiety that is a natural consequence of reporting fraud, a qui tam complaint in a False Claims Act case is filed under seal. When a case is filed under seal, it does not appear on a publicly available docket and the relator is prohibited from disclosing the existence of the lawsuit, or the allegations in the complaint, to anyone. The seal allows the government to covertly investigate the allegations of fraud.
The average length of a government investigation in an FCA case is about two years. Some cases could take considerably longer depending on the scope and complexity of the fraud. Throughout the duration of the government’s investigation, the relator is prohibited by law from discussing the case with anyone, including family, friends and co-workers. This can be a difficult time and can lead to feelings of isolation.
Once the government completes its investigation and the complaint is unsealed, the identity of the relator will become a matter of public record. This sudden loss of anonymity can adversely impact the whistleblower’s employment, social activities, and other aspects of their life.
While becoming a whistleblower can certainly be personally rewarding, and potentially financially rewarding as well, qui tam actions and claims submitted to the federal agency whistleblower programs often take years to resolve. The length of a whistleblower case, combined with the total unpredictability of a final result, can weigh heavily on a whistleblower.