Whistleblower FAQs

• Whistleblowers
• Insiders
• Current employees with knowledge of wrongful conduct or fraud
• Former employees with knowledge of wrongful conduct or fraud
• Other persons with knowledge of wrongful industry practices (including consultants and experts)

• The Federal and State False Claims Acts (qui tam cases)
  • The False Claims Act is the nation’s major whistleblower law. It allows persons with knowledge that a company is cheating the government or taxpayers of money to come forward and bring that information to the attention of the Department of Justice. It also offers certain protections against retaliation to whistleblowers.
  • Justice Department Recovers Over $3.7 Billion From False Claims Act Cases in Fiscal Year 2017
  • Recoveries in Whistleblower Suits—Of the $3.7 billion in settlements and judgments reported by the government in fiscal year 2017, $3.4 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $392 million to the “whistleblowers”—the individuals who exposed fraud and false claims by filing a qui tam complaint.
  • “Because those who defraud the government often hide their misconduct from public view, whistleblowers are often essential to uncovering the truth,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department’s recoveries this past year continue to reflect the valuable role that private parties can play in the government’s effort to combat false claims concerning government contracts and programs.”
  • Many states have similar False Claims Acts.
• The SEC Whistleblower Program
  • The SEC Whistleblower Program provides rewards for reporting violations of the federal securities laws and the Foreign Corrupt Practices Act (FCPA). Whistleblowers who report violations of the federal securities laws can receive significant financial rewards. SEC whistleblower rewards also can be paid to persons reporting bribery of foreign government officials and other violations of the FCPA.
  • SEC whistleblowers now have a right to 10-30% of monetary sanctions collected as a result of original information from the whistleblower that leads to a successful enforcement action or related action with at least $1 million in sanctions. The new law also has protections against retaliation for whistleblowers.
• The FIRREA (Bank Fraud) Program
  • FIRREA was enacted in 1989 in response to the savings and loan crisis. A unique civil money penalty provision went virtually unused in any significant way by the Justice Department until the 2008 financial crisis. 12 U.S.C. § 1833a.
  • FIRREA authorizes the Department to seek civil money penalties against individuals and entities that violate any one or more of a dozen criminal predicate statutes, including but not limited to, mail and wire fraud and bank fraud—statutes that are used with relative frequency by criminal divisions of the United States Attorneys’ offices.
  • Certain predicate acts, such as mail and wire fraud, that deal specifically with banks, financial institutions or financial regulatory agencies, even provide for liability where the financial harm is to the financial institution that is itself the subject of the investigation or the wrongdoer.
  • There are also statutory provisions that allow whistleblowers—called “declarants”—to serve the Attorney General with a complaint and potentially recover a declarant’s award of up to $1.6 million.
  • FIRREA is a tool the Department of Justice has shown a reinvigorated use of, aimed particularly at the financial services industry in the last five or so years. FIRREA gives the government broad authority to bring civil penalty claims with some significant advantages to the government and in some cases, an alternative benefit not offered by the False Claims Act.
  • FIRREA allows the United States a civil remedy to pursue fraud that does not involve taxpayer money. Assuming the requirements of FIRREA are met, FIRREA presents an opportunity for the United States to pursue a company for financial remedies when it otherwise would not have redress under the False Claims Act. Also, notably, FIRREA has less stringent requirements to establish liability than under the predicate criminal statutes, which form the basis for the civil penalty action. To prove a civil penalty case, the United States need only show that a criminal violation has occurred by a preponderance of the evidence, rather than being required to meet the higher standard of “beyond a reasonable doubt.
  • In addition, where the Department of Justice cannot meet the statute of limitations under the False Claims Act, which generally is six years, the FIRREA statute provides a generous ten year statute of limitations.
  • As a result of these and other advantages of FIRREA, and in light of the powerful results that have been realized, the Justice Department will increase its use of this tool in the upcoming decade. The United States has not kept statistics on its FIRREA recoveries in the same way it has its False Claims Act recoveries, but in the last several years, its most significant recoveries have been under FIRREA.
    • August 1, 2018 — Wells Fargo Paid $2.09 Billion Penalty for Allegedly Misrepresenting Quality of Loans Used in Residential Mortgage-Backed Securities.
    • October 6, 2017 - Pacific Western Bank (“PacWest”) paid $1.75 million to resolve allegations that First California Bank, which PacWest acquired in 2013, violated FIRREA by facilitating the embezzlement scheme of Kinde Durkee.
    • January 17, 2017 - Deutsche Bank paid $7.2 billion settlement relating to allegations that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.
    • November 21, 2016 - Ally Financial Inc. paid $52 million to settle allegations that its subsidiaries acted improperly in relation to 10 subprime residential mortgage backed securities (RMBS) in 2006 and 2007.
    • April 11, 2016 – Goldman Sachs paid a $5.06 billion settlement with Goldman Sachs related to Goldman’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.
    • February 11, 2016 - Morgan Stanley paid a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS).
    • March 19, 2015 – the Bank of New York Mellon paid $714 million related to allegations that BNYM engaged in fraud and other misconduct when providing foreign exchange (“FX”) services to its customers.
    • November 19, 2013 – JPMorgan Chase paid a $13 billion settlement to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by JPMorgan, Bear Stearns and Washington Mutual prior to Jan. 1, 2009.
• The CFTC Whistleblower Program
  • The financial crisis and the Madoff scandal prompted Congress to insist on the first meaningful SEC Whistleblower Program, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 (Dodd-Frank). This law also created a similar whistleblower program for the Commodity Futures Trading Commission (CFTC).
  • The CFTC Whistleblower Program provides rewards for reporting fraud in futures, options, and swaps, and other violations of the Commodity Exchange Act.
  • Whistleblowers who report fraud in commodity futures, options, and “swaps,” and other violations of the Commodity Exchange Act, can receive substantial financial rewards from the Commodity Futures Trading Commission (CFTC).
  • The CFTC regulates commodity futures and option markets in the United States. Its authority includes OTC derivatives, or “swaps,” markets. The CFTC’s mission includes protecting “market users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act.”
  • CFTC and SEC whistleblowers now have a right to 10-30% of the monetary sanctions recovered as a result of a whistleblower’s original information that leads to a recovery of at least $1 million in sanctions. There are also remedies for retaliation against whistleblowers.
  • In 2011, as the SEC received enormous pressure from potential defendants to weaken its draft whistleblower rules, we were part of a small committee of whistleblower attorneys who met with senior SEC enforcement officials and staff to discuss how to make the proposed SEC rules most effective. We also met with the head of the SEC and separately with each of the other SEC Commissioners.
  • We advocated that more categories of whistleblowers be eligible for rewards. We also urged the SEC Commissioners to resist pressure to require employees to commit likely career suicide through “mandatory internal reporting” within a company before approaching the SEC. The final SEC rules did expand the possible categories of whistleblowers, and they reward—but do not require–internal reporting by whistleblowers.
• The IRS Whistleblower Program
  • The IRS Whistleblower Program provides rewards for tax whistleblowers. Tax whistleblowers who report tax fraud, tax evasion, and other tax liability of at least $2 million can receive awards of 15% to 30% of the amount recovered by the IRS.
  • Tax violations can be wide-ranging from simple tax fraud within the United States to multi-billion dollar claims involving complex foreign and offshore tax evasion and may include tax fraud, tax evasion, and other tax violations to include:
    • Unreported Offshore Income
    • Unreported Subpart F Income
    • Abusive Tax Schemes and Tax Shelters
    • Transfer Pricing
    • Untaxed U.S. Branches of Foreign Corporations
    • Unlawful Manipulation of Net Operating Losses (NOL) and Other Tax Attributes
    • Unlawful Basis Manipulation
    • Understatement of Income
    • Overstatement of Deductions and Credits
  • We work with a team of the most experienced former IRS criminal and civil agents, forensic accountants, and tax lawyers with both international and U.S. tax expertise.
  • As former federal prosecutors who have also defended criminal tax cases, we develop fully for the IRS both the factual and legal arguments needed to support our client’s claims. To assist the IRS, we develop an investigative plan for each case that the IRS can pursue to make the claim successful. Our clients also take comfort in knowing that, unlike some other firms, our lawyers have both civil and criminal trial backgrounds. We are experienced in helping clients evaluate and minimize any risk to them of criminal prosecution, based on our white collar prosecution and defense backgrounds. We have also presented programs on protecting whistleblowers from criminal and civil liability, a timely topic in light of the UBS case.
  • Since 2007, we also have worked each year with the IRS Whistleblower Office senior staff in presenting programs to educate lawyers on the best practices in pursuing tax whistleblower claims. We also have kept other lawyers and the public informed about major developments in the evolving the IRS Whistleblower Program.
  • We have also advocated for tax whistleblowers for important changes to the proposed IRS whistleblower rules.

• Medicare/Medicaid Fraud
  • All Health Care Fraud
  • Ambulances
  • Anti-Kickback and Stark law
    • Safe harbor / exceptions
    • Remuneration
    • Inducement
    • Induce referrals
    • Physician Practice arrangements
    • FMV – Fair Market Value
  • Coding fraud
    • Upcoding
    • Excessive billing
    • E/M – Evaluation and Management
  • CMS / Centers for Medicare and Medicaid Fraud
  • Dental and Dentistry
  • DME – Durable Medical Equipment
    • Marketing
    • Sales
  • Elder abuse
    • Failure of Care
    • Worthless services
  • EHR / Electronic Health Records
  • False Certification
  • FEHB – Federal Employee Health Benefits
  • HHS Grants
  • HIPPA / Health Information Privacy & Portability Act
  • Home Health
    • Charity
    • Ineligibility
    • Unlicensed
  • Hospice
    • Upcoding
    • Medical Necessity
    • Ineligibility
    • Failure of care
  • Hospitals
    • Cost Reports
    • Systems
    • Physician arrangements
    • Psychiatric Hospitals
    • Teaching Hospitals
  • Implied Certification
  • Labs / Laboratories
    • Initial drug screens
    • Confirmatory tests
  • MAC / Medicare Administrative Contractor
  • Medical Necessity (Reasonable and Necessary)
  • Medicare Part A
    • Inpatient
    • Outpatient
    • Skilled nursing
    • SNF / Skilled nursing facility
  • Medicare Part B
  • Medicare Part C - Managed Care
  • Medicare Part D
    • Drug pricing fraud
  • Medicare Contractors
  • Nursing home
    • Failure of Care
  • Outpatient and Inpatient
  • Pharmacy / Pharmacies
  • Pharma fraud
    • Off-label marketing
  • Physician practice groups
  • Providers
  • Rehabilitation Services
    • RUGS
  • Retail pharmacies
  • Subsidy / Subsidies
  • TRICARE
    • Military health
  • USDA grants
  • ZPIC / Zone Program Integrity Contractor
• Financial Fraud
  • Banks
  • Department of Housing and Urban Development (HUD)
    • Mortgages
    • Grants
    • Loans
  • Department of Education
    • Grants
    • Guaranteed Loans
    • Insurance
    • Loans
    • Servicer
  • Export Import Bank
    • Export
    • Import
  • False or Fraudulent Statements to Investors
  • Financial Services
  • FIRREA (banks)
  • GSA – General Services Administration
  • Insider Trading
  • Loans
  • Mortgages
  • Procurement
  • Securities
  • Small Business Administration
    • Business Loan
    • MOSB – Minority Owned Small Business
    • Set Aside
    • SDVOSB – Small Disabled Veteran Owned Business
    • Veteran Loan
    • WOSB – Women Owned Small Business
• All Fraud Involving Federal or State Dollars or Money
  • Ability One Program
  • Customs
    • Country of Origin
    • Trade Agreement Act
  • Department of Defense
    • Contract
    • Contractor
    • Contracting Officer
    • Procurement
    • Request for Proposal
    • Solicitation
    • Statement of Work
  • Department of Education
    • Guaranteed Loan
    • Servicer
  • Department of Homeland Security
    • Immigration
    • National Security
  • Department of Interior
  • Department of Justice
    • Grant
    • Contract
  • Department of Labor
    • Wage
  • Department of Transportation
  • Department of the Treasury
    • SLUGS / Securities
  • Department of Veterans Affairs
    • Loan
    • Mortgage
    • Grant
    • Housing
    • Health Care
  • EPA - Environmental Protection Agency
  • FEMA - Federal Emergency Management Agency
  • FAR - Federal Acquisition Rules
    • FAR Disclosures
  • FCC - Federal Communication Commission
  • FEC – Federal Election Commission
  • NASA - National Aeronautic Space Agency
  • NRC - Nuclear Regulatory Commission
    • HEU – High Enriched Uranium
    • Non-HEU
  • SSA - Social Security Administration
  • USDA - United States Department of Agriculture
  • USPS - United States Postal Service
  • USAID – United States Aid for International Development

A whistleblower is someone who exposes dishonest, unethical, wasteful or illegal activity, often after attempting to correct the problem internally within a company.

You may wish to become a whistleblower if you have knowledge that someone is cheating the government of investors.

• Often whistleblowers are company insiders.
• Current or former employees with knowledge of wrongful conduct often think of whistleblowing.
• Experts with knowledge of industry practices may consider being whistleblowers.
• People who are trying to “do the right thing” make up most of our whistleblower clients.

The Department of Justice, SEC, CFTC, and IRS can’t fight fraud and cheating alone. They need company insiders with knowledge of wrongful practices—people who are trying to “do the right thing”—to share information with the government.

• The Department of Justice has shined a large spotlight on the opioid crisis. The Justice Department is going after drug companies, doctors and pharmacists who are fueling the nation’s opioid epidemic. But, let’s face it—the Justice Department cannot battle this epidemic alone. With one American dying of a drug overdose every nine minutes, the Justice Department needs the help of whistleblowers. Effective enforcement of our nation’s laws to solve the opioid crisis is dependent upon help from individuals with first-hand knowledge of the harmful practices that have brought us to the regrettable circumstances we find ourselves in today. The False Claims Act—the Justice Department’s primary civil enforcement tool—provides financial rewards to whistleblowers.
• Who has potential liability for the opioid crisis?
  • Pharmaceutical companies and their executives who pay doctors to prescribe opioids for unintended uses.
  • Doctors who put patients at risk because they are paid handsomely by the pharmaceutical industry to prescribe opioids.
  • Laboratories churning out test results that put maximizing billing ahead of patient safety.
  • Rehabilitation clinics that admit and discharge addicted patients through a revolving door rather than provide effective treatment options.
  • Drug insurance plans that cover opioids with no prior permission required.
  • Pharmacy benefits managers—the middlemen—that make access to opioids easier than less addictive alternative remedies.
• Holding these providers and companies accountable requires that knowledgeable individuals come forward. There are anti-retaliation laws to protect insiders and whistleblowers who provide tips and helpful information to the government. Insiders with personal knowledge of abusive practices that put patients at risk and waste taxpayer dollars can make an enormous difference. Now is the time to act.

There are retaliation protections for whistleblowers who help the Justice Department and who report wrongdoing to the SEC or CFTC. The IRS laws currently do not provide a remedy against retaliation, however.

There are financial reward programs for whistleblowers under the False Claims Act, the SEC Whistleblower Program, the CFTC Whistleblower Program, and the IRS Whistleblower Program, if certain requirements are met.

The Department of Justice is looking for information that any company has cheated any government-funded program like Medicare and Medicaid or government contracts or loans.

Ask yourself this question: do I have information not known to the public that my employer is misspending or wasting taxpayer money?

The Justice Department can’t fight fraud alone. It needs help from individuals with knowledge of fraudulent practices that cheat taxpayers to come forward and provide helpful information. In a single year nearly $90 billion Medicare and Medicaid dollars were misspent. That number increases every year. There’s a lot of money to be recovered on behalf of taxpayers.

• We approach cases as a team at Finch McCranie –so you’re getting the benefit of everyone’s experience—we will put a full court press on your case.
• Together we cover the landscape in terms of our knowledge and experience.
  • We’ve prosecuted cases in pretty much every industry : pharmaceutical, health care (hospice, nursing, ambulance, medical device, laboratories, provider practice groups, specialists, doctors, nurses, hospitals), defense, financial services, insurance, cigarette manufacturer, higher education and for-profits schools. We go the extra mile for our clients
  • We believe in our clients
  • We protect our clients
  • We are strong advocates for our clients

If you answer “yes” to this question, you may have inside knowledge of Anti-Kickback or Stark Law violations.

• The Anti-Kickback Law makes it illegal for health care providers to knowingly and willfully accept bribes, money or gifts in return for Medicare, Medicaid or other federal health care program business.
• The Stark Law also prohibits physicians from referring patients for certain health services – paid for by Medicare – to anyone with whom they have a financial relationship.
• These laws ensure health care providers base medical decisions on the best interest of the patient – not the best interest of their own wallet.
• If you share knowledge and proof that a hospital, drug company or health care provider may be getting kickbacks, - you may be entitled to a financial reward under the False Claims Act.

Both the Anti-Kickback Statute and the Stark Law are intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

Pharmaceutical companies, hospitals, and health care providers

• Accounting fraud;
• Investment and securities fraud;
• Insider trading;
• Foreign bribery and other FCPA violations;
• EB-5 investment fraud;
• Manipulation of a security’s price or volume;
• Fraudulent securities offerings and Ponzi schemes;
• Unregistered securities offerings;
• Investment adviser fraud;
• False or misleading statements about a company or investment;
• Inadequate internal controls;
• Deceptive non-GAAP financial measures; and
• Violations of auditor independence rules.