What is a Whistleblower?
A growing number of news stories about people reporting fraudulent and illegal activities have provided the general public with a better understanding of what it means to be a whistleblower. However, most people are not aware that there are many different laws, including state and federal, that may apply to a whistleblower action. These laws include the False Claim Act, Dodd-Frank Wall Street Reform and Consumer Protection Act, IRS whistleblower law, Sarbanes-Oxley Act, and several industry-specific whistleblower laws.
In many cases, a whistleblower is a current or former employee, but this is not required. The key aspect is that the whistleblower is disclosing information to a government or law enforcement agency regarding either a violation of a state or federal statute, dangerous working conditions, corruption, or something detrimental to the public interest. Once a person exercises his/her right to be a whistleblower, they are afforded certain protections under the law. For example, an employer may not retaliate against an employee for having exercised his or her right to be a whistleblower.
False Claims Act
The False Claims Act dates back roughly 150 years. It is the foundation of the United States whistleblower system, and is the most used statute in whistleblower claims. The “qui tam” provision of the False Claims Act allows private citizens to bring a lawsuit on behalf of the government, and then share in the government’s monetary recovery. The underlying requirement for a whistleblower action based on the False Claims Act is whether the complained of conduct caused the government to suffer a financial loss. Such a financial loss arises when the government is billed for products or services not provided, were unnecessary, or when the government over pays for a product or service.
Dodd-Frank Wall Street Reform and Consumer Protection Act
The False Claims Act only applies when the financial loss is due to fraud or misconduct, and impacts the federal government. Conversely, the Dodd-Frank Act was passed to address fraud on private investors, and its whistleblower protections apply to violations of the securities and commodities law. Insider trading, Ponzi schemes, and misrepresentation in securities sales are just a few of the fraudulent activities covered by the Dodd-Frank Act. Whistleblowers are awarded up to 30% of any government recovery based on information they provide. One significant difference between the False Claims Act and Dodd-Frank Act is that the latter does not require a formal complaint be filed with the federal court. It is sufficient enough to file a complaint with the appropriate agency.
IRS Whistleblower Law
Whistleblowers who report tax fraud or underpayment to the Internal Revenue Service can be eligible for a reward under the IRS Whistleblower Law. When fraud is reported to the IRS for investigation, the whistleblower may be awarded up to 30% of the tax, penalty, and other amount the IRS collects based on the information provided.
The Sarbanes-Oxley Act provides protection to employees of publically traded companies who report fraud against the company’s shareholders. The goal is to ensure that employees, including attorneys and auditors, disclose information which may harm investors. The law contains significant protections for corporate whistleblowers, and allows for the recovery of back-pay, special damages, and attorney fees.
Georgia Whistleblower Protection
Georgia recently past new legislation called the Georgia Taxpayer Protection False Claims Act. This law was designed to model the federal False Claims Act. Under the new law, state or local governments can recover treble damages, attorney fees, expenses and costs, as well as civil penalties for false or fraudulent claims. A qui tam provision is also included to encourage whistleblowers. This means a private person can sue on behalf of a state or local government, and will then be entitled to collect a percentage of the amount recovered. Like the federal law, anti-retaliatory provisions are also included for the protection of whistleblowers.
What should you do if you think you have a Whistleblower case?
The various laws applicable to whistleblower cases are complex and confusing. If you suspect misconduct or fraud, contact the experienced Atlanta whistleblower attorneys at Hill, Kertscher & Wharton, LLP. We can help you protect your identity, file the case under the correct statute, and maximize the financial recovery of your claim. Please email Doug Kertscher at firstname.lastname@example.org, or call our office at (770) 995-0553.