Whistleblowers who report individuals or businesses that have cheated or defrauded a state or federal government agency may be rewarded under state or federal law for reporting the wrongdoers. The law also protects whistleblowers from being fired for doing so.
Whistleblower suits are also known as qui tam suits, a Latin term meaning “he who pursues an action on the king’s behalf as well as his own.” Thus, whistleblowers literally assert claims on behalf of themselves and the government. If a case is successful, a whistleblower typically receives between 15% and 30% of the recovery for coming forward.
Although qui tam suits may arise out of any number of business dealings with a federal or state government agency, they most often take the following forms in situations involving Medicare, Medicaid, defense contracts, supply contracts, and construction contracts:
Mischarge. When a government agency is billed for goods or services that were not delivered, or over-billed for goods or services that were delivered.
Fraud in the inducement or false negotiation. When false statements are made, or illegal actions taken, when bidding or negotiating contracts with government agencies.
False certification. When an individual or business obtains government program benefits (for example, farm subsidies or loan guarantees) by making false statements about their eligibility for such benefits.
Substandard Products or Services. When a supplier of goods or services to a government agency provides substitute goods or services of inferior quality.
Reverse False Claim. When an individual or business uses a false record to reduce amounts owed to a government agency (for example, reductions of fines or penalties or not paying the full amount of royalties on minerals extracted from government lands).
United States ex rel.Johnson v. Shell Oil Co.; No. 9:96-CV-66 (E.D. Tex.) (recovery of underpaid royalties on oil produced from federal land) ($392 million settlement).