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Chicago Whistleblower Law

January 17, 2024

As the third largest city in the United States, Chicago is replete with opportunities for whistleblowers to expose wrongdoings and in turn potentially receive an award with a Chicago whistleblower lawyer.  Chicago has a population of 2.65 million[1] in the city alone, and 9.5 million in the wider metropolitan area. The windy city also ranks third in the United States in terms of its Gross Domestic Product—in 2021, the city reported a GDP of $630 billion.[2] Chicago then, like other major cities, is a hub of commercial transaction, as well as a concentrated center of welfare distribution. These offerings, funded by taxpayers and provided in good faith to the people of Chicago who require assistance, range from public insurance coverage to Payroll Protection Program (PPP) loan disbursements.

Due to the outsized budget and government programs with a lack of full oversight, Chicago is a vulnerable and popular target for fraud. For example, the city received an enormous sum in PPP loans—nearly $19 billion,[3] a fact that many fraudsters are keenly aware of. Indeed, the inspector general for the Small Business Administration estimates that at least 17% of PPP loans were obtained fraudulently throughout the United States, so by the law of averages that could mean there was $3 billion worth of Chicagoan PPP Loan fraud. The Department of Justice also reported that a substantial portion of PPP loans in Chicago specifically were obtained by gangs who used the funds to bolster their criminal enterprises.[4] Whistleblowers are therefore more important than ever before to maintain public safety and protect hard earned taxpayer funds in the city of Chicago.

Fraud in Chicago

It’s an open secret that there are many different types of fraud taking place in Chicago at all times. Each type involves entities knowingly defrauding the government (and in some cases private entities) for personal financial gain. These acts of fraud make valuable and hard-earned taxpayer resources unavailable to such recipients that have rightful claims to those government resources. Some of the most common types include PPP fraud, Medicaid/Medicare fraud, SEC fraud, Tax fraud, Cryptocurrency fraud and Insurance fraud.

PPP Loan Fraud

PPP Loans, or Payroll Protection Program loans, were distributed by the federal government to help small businesses make payroll payments during the height of the pandemic. These loans, in short, were designed to allow small businesses to stay operational, and for the employees of these businesses to retain their income. However, many of these loans were obtained fraudulently, by companies or entities ineligible for any loan relief. In many cases, fraudulent loan recipients would pocket the payroll money and fire their employees, or overreport their staff numbers so that they could receive inflated loan amounts. In other cases, ineligible companies would report that they had less than 500 employees or break their larger company into several smaller entities to fraudulently obtain the small business loans. In all iterations of PPP loan fraud, whistleblowers have been instrumental in government efforts to recover the fraudulently obtained funds, returning these funds to the taxpayer. In the process, whistleblowers are also awarded a substantive portion of the recovery. A Chicago whistleblower lawyer could file a False Claims Act lawsuit in which the individual could be eligible for up to 30% of what the government recovers as a PPP Loan fraud whistleblower award.

Medicare/Medicaid Fraud

Medicare/Medicaid funds are also a common target for fraud. These cases can involve fraudulent billing claims, fraudulent reporting of services performed, illegal use of kickback incentives, among a bevy of other fraud methods. In many cases, these schemes not only defraud the government and the taxpayer, but immediately harm the affected patients, many of whom find their medical needs neglected because of the comprehensive and manipulative schemes that steal from public medical funds.  Similar, to PPP, since federal funds are implicated a whistleblower attorney in Chicago could also commence a False Claims Act lawsuit.

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SEC, CFTC, Crypto, Tax, and Insurance

While PPP and Medicare/ Medicaid fraud are some of the more common types of fraud that occur in Chicago, there are certainly several other categories by which individuals may defraud the government. These include violations with regards to the SEC, federal and state tax law, private insurance claims, and cryptocurrency regulations. In all of these categories of fraud, a whistleblower may be entitled to a percentage of the recovery of up to 30%.  Chicago is home to some of the financial markets including the commodities markets which makes CFTC whistleblower activity fertile there.  Also, as explained below, Illinois has a unique statute that allows individuals to blow the whistle on private insurance fraud and also tax fraud, which gives other routes to whistleblowers not available in other locales.

Legal framework for Chicago Whistleblowers

Chicago whistleblowers may reveal fraud using two vital pieces of legislation. The first is the Federal False Claims Act, which allows whistleblowers to file suits on behalf of themselves and the government. If the government decides the case is worth pursuing, they may intervene. A whistleblower is entitled to up to 30% of the recovery if the case is successful.  Each year, billions of dollars are recovered through the use of the False Claims Act nationwide, meaning every year, relators, or those who act as whistleblowers, receive hundreds of millions in recovery awards.

The second piece of legislation that undergirds Chicago whistleblowers cases is the Illinois State False Claims Act. This version of the False Claims Act is much broader, and even allows whistleblowers to file Qui Tam lawsuits with regard to fraud against private insurance companies, and with regard to a wide range of tax fraud. In short, the state act “allows whistleblowers to bring suit in the name of the State of Illinois where a wrongdoer engages in conduct that defrauds the state or local governments of taxpayer dollars. The law is a broad reaching statute designed to address an array of wrongdoing from health care fraud to fraud involving any type of government contract or business relationship involving state or local money.” This means that Chicago whistleblowers have a greater degree of legal coverage such that they may report a wider net of fraud. In short, Chicago whistleblowers have some of the best and most comprehensive legal frameworks by which they may report fraud and earn award compensation.

Chicago Whistleblower Attorney

While Chicago whistleblowers certainly have a good deal of statutes at their disposal by which they may report fraud, it is still a decidedly complicated process. In any case of fraud, it is advised to secure a seasoned Chicago whistleblower attorney, who will ensure that the facts of the case are neatly and persuasively presented to the government. In so doing, Chicago whistleblower attorneys increase the chances that a case moves forward in the best possible light.  Moreover, experienced Chicago whistleblower attorneys will use the full force of the law to protect whistleblowers and conceal their identity when possible. In sum, a Chicago whistleblower attorney both protects the whistleblower against retaliation and maximizes the strength of the case. The best of all, is that some of the best Chicago whistleblower lawyers offer free, confidential consultations, so if you have information about wrongdoing and don’t know what to do, take advantage of the opportunity to have that confidential conversation.

[1] https://www.census.gov/quickfacts/fact/table/chicagocityillinois,US/PST045222

[2] https://www.chicago.gov/content/dam/city/depts/COFA/OtherReports/State-of-the-Economy-Chicago-2023.pdf

[3] https://data.usatoday.com/paycheck-protection-program-loans/summary/illinois/cook-county/17031/

[4] https://chicago.suntimes.com/2023/10/6/23903273/ppp-fraud-gangs-covid-relief-guns-drugs-hit-justice-department-michael-galdo