Blowing the Whistle on Corrupt Corporations

Most people have heard of the whistleblower laws. They think, “oh yeah, that’s great, but how many people actually work for a corrupt corporation?” Well, it’s a little bigger than that. In fact, the whistleblower laws are actually there to protect those who turn in companies that are trying to defraud the government out of their money. The best part is that they contain a qui tam clause; a clause that allows them to collect a portion of the settlement as a reward.

What is a Qui Tam Lawsuit?

Qui Tam actually dates back way further than the qui tam clause in the whistleblower laws. Essentially it is part of a Latin phrase that, in its entirety, meant “to sue on behalf of the king.” Essentially a common person could sue another common person if they knew of fraud taking place. Confusing? Let’s start with the American version.

Back in the 1860’s Lincoln was president and the US was in the midst of a civil war. There were supplies being supplied to both sides and the government was paying for all of it. Some of those providing supplies were taking advantage of the government by supplying rations that had already spoiled, horses that were near death, or boxes of munitions filled with nothing but sawdust. To combat the corruption, Lincoln passed the Federal False Claims Act. This act stated that any citizen could sue on behalf of the government to stop the fraud, as a reward they would collect a portion of the settlement.

Now let’s fast forward 150 years. Today the law is largely the same, but the reward and the crimes have changed. Much of the fraud now has to do with Medicaid and Medicare, or those who have contracts with the government. Often people feel that since the programs are so big they can cut corners in order to increase their profits. What the False Claims Act does is provide a way for the employees to file a suit, and potentially collect up to 30% of the settlement issued against the perpetrator; that 30% could be millions of dollars.

Blowing the Whistle

Since many people are scared of retaliation, the whistleblower laws are there to protect them. The government doesn’t like losing money, and as taxpayers we shouldn’t like it either. So to help the government save money, and to pocket a reward, the False Claims Act with the qui tam clause is in place; on top of that are the whistleblower laws to keep things orderly.

If you know of fraud occurring, you could blow the whistle and potentially collect a hefty settlement.