Some sources—like The Economist, for example– have said that 2012 will be the year of the whistleblower. Recent news from the mortgage and banking industries seem to confirm predictions that regulators and courts are ready to reward and protect those who come forward to stop fraudulent and illegal company and industry practices.
A whistleblower in Texas will receive $14.5 million from a lawsuit he filed because of mortgage scams connected to Bank of America, according to news reports. The lawsuit was filed under the False Claims Act, which allows people who come forward as whistleblowers to receive a part of any settlements that get reached because of the information or evidence they can provide. The Texas man said that he came forward to expose the unfair mortgage practices because he wanted to help people who had been hurt by real estate crashes and skyrocketing foreclosures. To do this, the man had to keep the lawsuit he filed a secret—even from his family—for four years.
Just as the Department of Justice celebrated the Bank of America settlement, experts in the financial industry released the results of a study showing that employees feel sometimes overwhelming pressure to break the law because of company policies and bonuses. Regulators and consumer advocates say that recent laws, like the Dodd-Frank Wall Street Reform and Consumer Protection Act, are meant to help people who step forward to blow the whistle on fraudulent, unfair or illegal company practices.
The Dodd-Frank Act, like the False Claims Act, not only helps protect whistleblowers — it also helps ensure that people who step forward to help the government get back money it lost through fraud are properly rewarded for the risks they take. People who are able to file claims under the Dodd-Frank Act or the False Claims Act can receive up to 30 percent of the settlement money they help the government secure.
News coverage about qui tam, or whistleblower, lawsuits shows growing support from both consumer advocates and federal regulators. As South Carolina lawyer Bert Louthian has said, “Our laws recognize the valuable service that whistleblowers provide to our country.”
In addition to important laws that support and protect whistleblowers through the qui tam process, more and more government agencies are dedicating resources to the fight against fraud. Department of Health and Human Services Secretary Kathleen Sebelius recently announced an additional $300 million dedicated to pursuing healthcare fraud. This category can include things like false claims and fraudulent billing for health care services under Medicare, Medicaid and Social Security. Recent figures state that qui tam lawsuits are responsible for around $16 billion in fraud settlements since 1987—and experts say that figure will only get bigger as efforts to prosecute fraud get more and more aggressive.
However, along with more prosecutions for fraud, government officials said that they are also very choosy about which qui tam cases they will accept. As a Department of Justice attorney said in an ABC article, “We reject more cases than we accept.” Because of the difficulties that can come with filing qui tam cases, it’s important that potential whistleblowers find an attorney who is experienced in qui tam law to help them.
As our own Bert Louthian has said, “It’s important for these individuals to know they won’t be alone throughout the process. They’ll have an attorney standing by them every step of the way.”