Whistleblower Legal Representation
The Law Office of Jeffrey M. Haber is committed to fighting for the rights of whistleblowers who expose fraud on the government and who are entitled to receive the compensation and protection they deserve for coming forward on behalf of taxpayers.
Mr. Haber’s securities background has provided him with years of experience talking to corporate insiders and other witnesses regarding corporate fraud and other wrongdoing. As an outgrowth of that experience, Mr. Haber has been representing individuals wishing to expose fraud against the government and violations of the law and obtain the compensation and protections afforded by the various statutes and programs established for those purposes: the False Claims Act, the Securities and Exchange Commission (“SEC”) whistleblower program, the Commodity Futures Trading Commission (“CFTC”) whistleblower program and the Internal Revenue Service (“IRS”) whistleblower program.
The False Claims Act
Each year, the federal government loses billions of dollars to waste, fraud and abuse of taxpayer funds. Whistleblowers can combat that fraud by filing a lawsuit under the federal False Claims Act.
The False Claims Act contains qui tam, or “whistleblower”, provisions that allow individuals (referred to as “relators” or “whistleblowers”) with evidence of fraud against the government to sue on behalf of the government in order to recover stolen funds. The False Claims Act prohibits people and companies from defrauding the federal government by knowingly presenting, or causing to be presented, a false claim for payment or approval. Violations of the False Claims Act can result in a judgment in an amount equal to three times the losses the government sustained, plus civil fines.
The types of fraud that can give rise to liability under the False Claims Act are many. Healthcare fraud (such as Medicaid and Medicare fraud), defense contractor fraud, overcharging the government, billing for services that were never provided, paying kickbacks, violating federal regulatory requirements, and fraud in the context of educational loans or grants are just a few of the categories of fraudulent conduct that have given rise to successful False Claims Act lawsuits filed by whistleblowers over the years.
As a financial incentive to encourage individuals to expose fraudulent misconduct, the False Claims Act provides that whistleblowers can recover a significant portion of any recovery on behalf of the government as a reward for the risks they encounter in coming forward. Although corporate insiders can bring a claim, it is not necessary for the person exposing the fraud to be a corporate officer, member of management – or even an employee – to be eligible to collect an award. If the whistleblower’s information leads to a successful False Claims Act action, the whistleblower can recover between 15% and 30% of the financial recovery, provided certain conditions are met.
In addition to the False Claims Act, many states and the District of Columbia have enacted their own false claims acts. Although there are some differences among these laws, they are generally modeled after the federal False Claims Act, and they all have similar whistleblower reward provisions. There are, however, differences. In New York, for example, the False Claims Act allows a whistleblower to pursue a qui tam action against a company for violating the New York State tax laws. Over the years, this provision has been successfully used to recover substantial amounts of money damages.
The SEC/CFTC Whistleblower Program
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law. The Dodd-Frank Act enhanced the Securities and Exchange Commission’s (“SEC”) whistleblower program by providing whistleblower awards to those who provide the SEC with “original information” about violations of the federal securities laws, as well as the Foreign Corrupt Practices Act. Information is considered to be “original information” when it is unknown to the SEC and derived from the whistleblower’s independent knowledge or analysis.
The Dodd-Frank Act also strengthens the whistleblower protection provisions of the Sarbanes-Oxley Act and the False Claims Act.
If the whistleblower’s information results in a recovery of more than $1 million by the SEC or another government agency, the whistleblower may receive between 10% and 30% of that recovery, provided that certain conditions are met.
In addition, the Dodd-Frank Act provides whistleblowers with a private cause of action in the event they are discharged or discriminated against by their employers for blowing the whistle. The whistleblower may bring such an action in federal court and seek relief that includes reinstatement, double back pay with interest, litigation costs, expert witness fees, and reasonable attorney’s fees.
Importantly, a whistleblower can report a violation anonymously, so long as the whistleblower is represented by an attorney.
Finally, the Dodd-Frank Act includes a rewards program for whistleblowers who report violations of the commodities laws to the CFTC. The CFTC whistleblower program is similar to the SEC program.
The IRS Whistleblower Program
In 2006, Congress passed the Tax Relief and Health Care Act (the “TRHCA”). The TRHCA created a whistleblower program for individuals informing the IRS of tax fraud and other misconduct, such as an underpayment of taxes. The TRHCA provides whistleblowers with a monetary reward when the amount owed to the IRS, in combination with back taxes, penalties, interest and additions to tax, exceeds $2 million. If the wrongdoer is an individual, that person’s gross income for the applicable year must also exceed $200,000. If the IRS uses the information provided by the whistleblower, the agency can award the whistleblower between 15% and 30% of the additional tax, penalty and other amounts it collects over the $2 million threshold. If the amount in dispute is less than $2 million, or if certain other conditions are not met, whistleblowers are eligible to receive a maximum award of up to 15%, or up to $10 million.
Like the SEC/CFTC whistleblower programs, the whistleblower must come forward with “original information” that is specific and credible. If the IRS determines that the whistleblower was not the original source of the information but still contributes to the additional collection, the reward is capped at 10% of the recovery. If there are two or more whistleblowers who disclose the same underpayment or tax fraud, the whistleblower who made the original disclosure will receive the award. It is therefore critical that potential whistleblowers act quickly in reporting tax fraud under the IRS whistleblower program.
The fact that an individual participated in the fraudulent conduct does not preclude a reward. Instead, the whistleblower’s involvement may be used by the IRS as a basis to reduce the reward.
The Firm’s Experience and Approach
Jeffrey M. Haber has years of experience pursuing whistleblower cases under the federal and state False Claims Acts, as well as pursuing SEC and CFTC claims under the Dodd-Frank Act, and tax fraud claims under the Tax Relief and Health Care Act of 2006.
Mr. Haber is experienced in knowing how to pursue your case most effectively from the first interview, through the preparation of the complaint and submission of supporting documentation, to the presentation of your case to the government. Equally important, Mr. Haber recognizes that, in addition to preparing the most compelling case possible, it is essential to develop a close relationship with the whistleblower – a relationship that is based on an open and full exchange of information and ideas. To that end, Mr. Haber makes it a priority to establish such a relationship with his clients.
If you have knowledge of a violation of the False Claims Act, the federal securities and commodities laws or the tax code, contact the Law Office of Jeffrey M. Haber to report your concerns in a confidential manner and explore your legal options for compensation.