Friday, March 27, 2015

What is a Whistleblower?

Fraud is a very broad term. When you hear about someone “defrauding the Federal government”, you might imagine a complex mafia-like operation going on behind secure doors. With the way Hollywood movies portray everything, it can be hard to envision fraud in a realistic way. It’s not uncommon for people to go their whole lives completely unaware that even the largest, most successful companies partake in illegal or fraudulent activities on a regular basis. On top of that, their acts of fraud can even be a large reason for that company’s success. However, if and when they get caught, or when a “whistleblower” speaks out and gives the government insider information, the harsh consequences are usually justified. Governmental fraud is an epidemic and the cause of lots of lost taxpayer money. However, because fraud is not easily detectable, it often goes unnoticed. We taxpayers rely on brave whistleblowers to present and prevent fraud. To get an idea of how much of an impact it has had on our nation, take note that our Federal government has recovered over $40 billion since 1987 through a countless number of False Claims Act (FCA) lawsuits. 

Despite how it may appear in the media, it’s important to know that this organized deception doesn’t always deal with identity theft, stolen credit cards, and tax evasion. The same word—fraud—is used for all levels of fraudulent activities, from trivial to momentous ones—with differing civil and criminal specifications. In its most simple form regarding tort or civil law, fraud can be described as “the intentional misrepresentation or concealment of an important fact upon which the victim is meant to rely, and in fact does rely, to the harm of the victim.”[2] In other words, an entity or organization cannot intentionally lie about something that another entity or organization must and will rely on. If an innocent consumer uses a product or service with the implied or given understanding and belief that said product is “safe”—even though the company supplying that product or service factually knows or believes otherwise, but either continues to misrepresent, or fails to prevent the misrepresentation—and that consumer is later injured in a way that contradicts what has been stated about the product or service and its qualities; that’s fraud for sure. 

Need a real world example to understand civil fraud? 

A fictional eatery by the name of Restaurant A houses certain food products which contain some sort of peanut ingredient. However, since business is hurting recently, they’ve made the bold decision to advertise themselves as “the only 100% peanut-free restaurant in the world!”Luckily for them, no one with severe peanut allergies has eaten there, so they’ve yet to get caught in the act of deception. The brave Employee A is fully aware of the lies; he knows for sure that certain foods at the restaurant contain peanuts. He knows it’s a marketing attempt to wrongly attract more customers. Restaurant A falsely advertising itself as “peanut-free” would be the “intentional misrepresentation” in this scenario. 

Customer A walks in and is the first customer of many to be victim of this intentional deception. She’s got severe peanut allergies, but she’s excited to try multiple food items from the peanut-free restaurant as she’s had troubles in the past. This customer is “meant to rely” on the fact that there’s no peanut-based products used in the food, and will therefore be safe for her to consume. Of course, once the allergen reaches her system, she has a violent allergic reaction and must be sent to the ER. Customer A could have a products liability case against the restaurant, but she likely has no idea what went wrong. It couldn’t have been an allergic reaction to peanuts, because that restaurant is peanut-free, right? Well; that’s where things get complicated, investigators get involved, and a class action begins. 

However, let’s focus more on the whistleblower aspect of this whole thing. If it’s never determined that Restaurant A is lying about being pure of peanut-based ingredients, how will the allergic reactions ever stop? Without the insider information that Employee A has, the government may never suspect any wrongdoing on the restaurant’s end. Will this employee make the brave choice to “blow the whistle” and force the company to face the consequences of their fraudulent and harmful choices? He could lose his job; he risks the chance of ever working in the restaurant business again. Not only that, but his efforts may be shot down; leaving him not only empty handed, but out of a career. Is it worth it? Let’s delve deeper into the characteristics of a whistleblower. 

So what makes a whistleblower, a whistleblower? 

Just like fraud, the term whistleblower is very vague. You may imagine conspiracy theorists or sports coaches, but in reality, the meaning goes much deeper than that. Occasionally, whistleblowers can be viewed as heroes, exposing the most severe levels of fraudulent activities within an organization. Other times, whistleblowers can be fraudulent themselves. Intentionally hurting an entity’s reputation by writing or through spoken word is known as defamation; libel and slander respectively. So don’t go blowing that whistle all over the place! If you’re interfering with the entity’s business or operation (i.e. making it a public matter instead of a governmentally “protected disclosure”), you might get yourself in to some trouble unless you can undoubtedly prove that you speak the truth. Proving something like that is no easy task these days. 

What sets apart a governmental fraud whistleblower from the likes of a conspiracy theory whistleblower is the False Claims Act, as mentioned in the first paragraph. This act covers pretty much anything and everything that has to deal with the government losing funds due to deception. Additionally, it very much protects the whistleblower (appropriately known as a relator) by keeping everything sealed. A correctly presented and legitimate lawsuit under the False Claims Act brought forward by a relator will be kept confidential. If your employer were to discover your intentions of uncovering their fraudulent activities, they may feel pressured to retaliate. However, a relator can have some peace of mind knowing that they are protected from any retaliation (i.e. position termination, demotion, suspension, etc.) through the FCA. Lawsuits regarding the FCA brought forward by relators (whistleblowers) are known as Qui Tam lawsuits. 

When should I blow the whistle? 

If you find out that your boss is overcharging a few customers here and there, don’t be too quick to report him to a Federal agency in hopes of getting a few bucks in return. Successful Qui Tam lawsuits require more than that, and furthermore, your play-by-plays have to be kept quiet. The information regarding suspected fraud that you possess and plan to share has to be original and lead to the recovery of at least $1 million in order for you to get a cut of it. Assuming that your tip(s) leads to the uncovering of fraud on that large of a scale, you could be looking at a 15 to 30% split of the recovered financial losses. What would have to be determined next is whether or not that “split” is worth risking your career over. When all the cards are drawn and the action is over, who will come out on top? As a whistleblower, you should have your eyes set on punishing a company for their unethical and unjust actions and recollecting a potentially significant amount of taxpayer dollars for the government, rather than profiting from a sticky and suspicious situation you’ve found yourself in. 

With that said, it’s very important to have your facts straight and to keep your intentions on the down-low. Big companies or organizations that have gotten away with defrauding the government for long periods of time are clearly experienced at it. If they were to learn of an impending fraud investigation, they could be inclined to set up some serious defense. When you’re on your own, it will be no small feat to end an organization’s fraudulent activities. In fact, many whistleblowers are offered “hush money” to back off and “call it even”. Sadly, the temptation can get the best of a nervous or inept whistleblower—they accept the bribe and the fraud continues, maybe on a greater scale than before. Don’t be tempted; don’t be scared; speak up! It may seem like an impossible feat, but remember that there are many paths for assistance. An experienced qui tam lawyer can be of great assistance to you by offering a free consultation and case evaluation which is kept completely confidential. By taking advantage of this offer, you can learn as soon as possible if your decision to pursue a wrongdoer for fraud is poor, fair, or smart. If you’re interested in that offer, contact a qui tam litigation attorney today. 

What are some examples of fraud that I should be aware of? 

According to the official False Claims Act website, the most common types of governmental fraud are:
  • “Health Care Fraud”
  • “Pharmaceutical Fraud”
  • “Medicare Part D Fraud”
  • “Defense Contract Fraud”
  • “Energy Fraud”
  • “Disaster Relief Fraud”
  • “Construction and Procurement Fraud”
  • “Research Fraud”
  • “Financial Industry Fraud”
A growing concern, and the ones which deal most directly with the health and well-being of innocent people, are the medical-related categories. Health care fraud has and will likely always drain taxpayer dollars significantly. The same goes for the pharmaceutical industry, with fraud being not only common, but expected. Medicare Part D goes hand in hand with pharmaceuticals. Here are a few examples of ways that health care providers, medical practices, surgery centers, and more are defrauding not only their fellow taxpayers, but the nation as a whole: 

Health Care Fraud: Often times, medical providers will:
  • Overcharge for medical procedures.
  • Charge for procedures that were never performed.
  • Charge for procedures that didn’t need to be done.
Because the government lacks medically-trained professionals that can scout each individual practice to ensure cooperation and non-fraudulent activities, they heavily rely on whistleblowers with personal involvement to step forward and assist them. 

(Example: Boss A pressures his employees at his medical practice to perform x-rays on as many people as possible. Getting an x-ray scan can be an expensive procedure and, when performed on someone who doesn’t really need it, can lead to the victim of fraud (or his Federally-funded health insurer) paying unnecessary medical bills to the practice.) 

Pharmaceutical Industry Fraud: Big Pharma companies like Johnson & Johnson, Pfizer, and GlaxoSmithKline know how to make big money using fraudulent methods such as:
  • Marketing their drug for uses that were not approved by the FDA.
  • Bribing or winning the favor of hospitals or physicians to prescribe their drug to patients.
  • Manipulating or concealing the true sale price of their drug to get higher payouts from Medicare.
Unfortunately, millions of Americans rely on prescription drugs to continue living. Because they need these drugs, patients will often turn a blind eye to suspicious activity, completely unaware that they’re being taken advantage of.

(Example: Pharmaceutical Company A sells their drug in bulk to Drug Wholesaler A for a significantly lower price than they would anyone else. The government requires that Pharmaceutical Company A sells to Medicaid programs at the same rate of the best deal they’ve given anyone else. Instead of being honest about it, Pharmaceutical Company A does the deal with Drug Wholesaler A under the table and fails to record the final sale price, therefore giving the Medicaid program an incorrect or nonexistent sales history to base their buy price on.) 

Medicare Part D Fraud: This type of fraud has many of the same characteristics of pharmaceutical fraud. 

(Example: Doctor A is paid-off by Pharmaceutical Company A to pressure patients into being prescribed a newer, updated prescription to treat their condition. Patient A is pleased to hear all of the benefits, and so agrees to take the drug. His Federally-funded Medicare Part D covers the cost of these brand-name pills, but he’s actually given a generic alternative. The patient has no idea, the government has no idea, but both Doctor A and Pharmaceutical Company A pocket some extra taxpayer dollars.) 


Whether you’re working for a private medical practice or a large surgery center, it’s possible that you’ve witnessed fraudulent activities occur around you. If that is the case, you may be hesitant to move forward or speak out, but don’t be. Here at Dolman Law Group, we strive to make you feel comfortable with your choice to become a relator and assist in the uncovering of governmental fraud. If you believe you have information that could lead to such actions, you shouldn’t hesitate to get in touch. 

Our team of experienced qui tam litigation attorneys can help you decide which course of action is in your best interest and will ensure your anonymity. If you expose fraud against the government, you could be eligible to receive significant financial compensation. For more information, or to get in touch with an attorney today, use our website or give us a call at 727-451-6900. 

Dolman Law Group
800 North Belcher Road
Clearwater, FL 33765
(727) 451-6900