The federal government uses the False Claims Act to pursue people accused of not paying, intentionally underpaying or otherwise committing fraud on their taxes or defrauding a government agency. Individual states have their own statutes related to fraud. The Arizona Department of Revenue’s Criminal Investigations Unit investigates charges related to state income tax fraud, but, currently, Arizona does not have a clearly defined program to compensate whistleblowers.
The federal government, however, offers a substantial reward for information that leads to the collection of money owed by fraudsters. There are three major categories of qui tam whistleblower cases though all of them have their origins in ancient Roman law and in 1863’s False Claim Act: the Tax Whistleblower Program, the False Claims Act amendments of the 1980s, and the SEC Whistleblower Law.
Usually the reward for the whistleblower, or relator, is 15-30% of the amount recovered in the Tax Whistleblower Program. False Claims Act violations typically involve fraud related to Medicare and Medicaid but may also include dishonest contractors working with a government entity such as military subcontractors or private companies providing services to FEMA who fail to provide services for which they were paid. The final category of qui tam involves allegations of fraud related to securities, stocks and bonds. If the Securities and Exchange Commission or Commodity Futures Trading Commission obtains useful information that leads to prosecution and they are able to collect damages from the individual or corporation that perpetrated the fraud, the whistleblower is also entitled to a reward. These typically lead to a reward of 10-30% of the recovered amount.
Violators are required to pay back the federal government three times the actual damages suffered. They must also pay civil penalties that may exceed $10, 000 for each violation. The government takes allegations of fraud extremely seriously especially in the time of a recession and historically low tax burdens. They want to collect as much as possible within the limits of the law. This is a major reason that they offer a substantial reward for actionable information and why the penalties are so severe. Like everyone else in America, the government wants what they consider to be theirs and they reward anyone who helps them obtain it. This is, essentially, what the term “qui tam” means.
“Qui tam” is a Latin abbreviation of a much longer phrase: “qui tam pro domino rege quam pro se ipso in hac parte sequitur.” This means, essentially, “he who brings an action for the king as well as for himself.” Thus, the government should get what it deserves but a citizen who helps in the process deserves a reward.
If you are considering taking action and reporting allegations of fraud related to the government, you should contact an attorney before proceeding. Though the government investigators from the Department of Justice or other law enforcement body may be supportive and eagerly seek your assistance, the government is a labyrinth of bureaucracy and obfuscation, whether intentional or not. Furthermore, if your employer or former employer is involved with fraud that involves a substantial sum, you need an ally who can protect your rights and educate you on the process for pursuing your reward. Contact Arizona White Collar Attorney Ashley D. Adams to assist you with the necessary steps. Throughout the process, you will have experienced legal counsel on your side and you will owe no attorneys’ fees until you collect your qui tam reward.
Your reward will be determined by many factors including the following: usefulness of the information provided; how promptly the criminal act was reported in relation to when it occurred; if the information was particularly hidden from the government and it would not have been discovered without the whistleblower’s assistance; if the revelation will discourage others from engaging in this particular type of fraud; and also the level of cooperation the whistleblower offers throughout the investigation and possible trial. An attorney can help throughout the entire process and maximize the opportunities for getting the full reward. Trying to traverse the government’s whistleblower reward program without a skilled attorney reduces the relator’s chances of obtaining full compensation.