How to Report Fraud against the Government and get a Reward under the False Claims Act

Approximately 10% of all government spending is lost due to fraud. Because the government spends over a trillion dollars each year, that adds up to $100 billion. What can you do about it or how can you get a reward for reporting fraud against the government?

Often, fraud goes undetected unless a whistleblower steps forward. In fact, 80% of all government fraud cases are brought by whistleblowers. Under the False Claims Act, the Department of Justice has a whistleblower reward program that pays rewards of a portion of the funds it recovers.

So far, the Department of Justice whistleblower reward program has recovered $25 billion back from those who cheated the government and has paid out $3 billion in rewards to whistleblowers. However, most Americans are still unaware of this reward program where a private person who steps forward with information gets a portion of the recovery for reporting fraud against the government—up to 30% of what the Department of Justice recovers back from the cheating company. The largest rewards for reporting fraud against the government exceed $100 million, and the average whistleblower reward is $1 million.

Under the False Claims Act, the Department of Justice pays rewards of up to 30% of the funds it recovers. This includes reporting fraud under any of the more than 20 federal programs, such as Medicare or military fraud. It even extends to Bailout fraud and TARP fraud. Many states now have similar reward programs. The IRS is even offering whistleblower rewards for reporting tax evasion or income tax fraud.

How to Report Fraud under the False Claims Act

Like anything else involving the government, you have to follow the exact procedures—or else you won’t meet the standards and won’t get a reward.  Although the government wants to partner with you, there are some technical requirements you must meet and pitfalls to avoid.

What most don’t realize is that you must do more than call a hotline or be the first one to contact the government. That is not enough. To be eligible for a whistleblower reward you must actually file an application in a legal court proceeding in federal court similar to what you would do in any civil lawsuit.  In addition, you must actually use a qualified attorney. Because it is a legal proceeding, it only makes sense to hire an attorney familiar with the False Claims Act. (Most quality attorneys representing whistleblowers work on a contingency, so you won’t have to spend any out of pocket money to claim a reward.)

If you are the first one to properly file and follow the correct steps, you are eligible for up to 25% of the amount of fraudulent payments recovered back.  Approximately $3 billion in whistleblower rewards have already been paid, and the largest rewards exceed $150 million. Nearly 1 out of 5 applicants have received a reward.

Examples of Fraud Schemes against the Government

The Department of Justice whistleblower reward program applies to anytime a person or company cheats or commits fraud under any federal contract or program, such as Medicare Fraud and Medicaid Fraud, TARP fraud, Bailout Program fraud, and fraud against the military, homeland security and other federal agencies. It even includes companies cheating the Post Office or underpaying royalties as well as grant fraud (research/educational) or guaranteed loan program fraud. It doesn’t matter what government program was cheated, you can earn a reward for reporting it. The ways companies cheat the government are numerous, and the government needs your help in stamping out fraud against the government.

It’s time to find out how to get a reward for reporting fraud against the government under the False Claims Act.

Joel Hesch spent 15 years as an attorney in the Fraud Division of the Department of Justice (1990-2006) administering the national whistleblower reward program. He is the author of a recent book, Whistleblowing: A Guide to Government Reward Programs (How to Collect Millions of Dollars for Reporting Fraud). He is currently a law school professor and represents whistleblowers filing for monetary rewards for reporting fraud. Please visit his informative website, www.HowToReportFraud.com, to learn more about government reward programs.

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