STATISTICS EVERY WHISTLEBLOWER SHOULD KNOW

You hear about the large settlements in whistleblower cases each year and sometimes the numbers are staggering. In the largest cases whistleblowers can receive over $100 million. Some cases against the pharmaceutical industry have been really really big: hundreds of millions of dollars paid to resolve allegations of fraud in pricing drugs, in paying kickbacks to physicians to encourage them to prescribe drugs and for selling drugs for purposes not approved by the FDA. There are also a lot of healthcare fraud cases involving Medicare and Medicaid in which some nation-wide companies have paid similarly large sums for fraudulently billing the government for health services. I hear the question every day: how do I know if I have a case and if so, is it a strong claim? Then: what is my case worth? These are difficult questions in an evolving arena of law and just to find the answer takes time, analysis and resources. Clearly, there are new laws which enable more individuals to bring whistleblower cases. Like the law allowing seamen who successfully report dumping of bilge or other pollution in the sea to collect 50% of what the government recovers in criminal fines. Recently a few seamen, recording the dumping on their cell phones each collected above one million dollars as their “bounty”. Now the word is getting out. And there are new laws and regs for individuals reporting larger cases of tax fraud, allowing the whistleblower upto 30% of the government’s recoupment of the taxes owed plus penalties. There are a few items which every whistleblower should ponder. First, as it stands there are about 100 “False Claims Act Cases” settled each year. That does not include the law I mentioned concerning ocean pollution or the IRS whistleblower laws or even the more recently passed whistleblower provisions of the Dodd-Frank Act, which deals with financial fraud. These too tend to be large amounts like the $158 million settlement by Citigroup last week for its fraudulent certifications to the government regarding its mortgage loan information. The False Claims Act is generally used to deal with fraud on the government, federal and state in healthcare, military procurement, military services and oil or gas lease fraud on the government. One major hurdle is something called the “public disclosure bar” This means that the allegations are already out there in the public or the government is already aware of the fraud through another source. If that’s the case, you are probably not going to be successful unless you have new information. In addition, once the case is properly filed and served (there are specific protocols to follow), the government has the right to “intervene” in your case, which is a great thing as it will bring the power of Uncle Sam to the courtroom. However, presently, the government joins only 25% of all filed False Claims Act cases. This means that if you have a viable case and the government doesn’t join, your lawyer will have to litigate the matter to find success. About 100 False Claims Act cases settle each year. Of those, only about five are the blockbuster for hundreds of millions or even billions of dollars. The rest, 95% are settled for an average of about $10 million each, which after counsel fees and taxes leaves the whistleblower about one million dollars. All of this is not to dissuade you but these cases take thought, research, analysis and lots of hard work and before you file its good to know where you stand.