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The Importance of Timely Reporting in Whistleblower Cases

March 9, 2023

Timing is everything in life and for a whistleblower if you fail to report a fraud in a timely manner, you may lose your right to recover a whistleblower award for yourself under statutes like the False Claims Act and other qui tam whistleblower statutes.  Whistleblowers play a crucial role in uncovering fraud, waste, and abuse across numerous industries. Whistleblowers’ information is frequently relied upon by government agencies, including the Department of Justice, in exposing misconduct that would otherwise go undetected. However, timely reporting is one of the most important factors that can determine the success of a whistleblower case. Not only can prompt filing of a whistleblower case alert the appropriate enforcement authorities of the misconduct and minimize future harm, but doing so can also have a significant impact on the whistleblower’s legal rights and potential recovery.

Whistleblower reporting - The importance of timely reporting in whistleblower cases.The Importance of Reporting Fraud in a Timely Manner

Timely reporting is critical in whistleblower cases for several reasons. For starters, it can help to prevent the misconduct from spreading or causing additional harm to the public and the taxpayers. Moreover, the longer fraud continues, it becomes more entrenched and harder to root out. This is what happened with the infamous fraudster Bernie Madoff.  Had the SEC successfully prosecuted Madoff for fraud or even objectively investigated Bernard L. Madoff Investment Securities LLC, its spectacular collapse coinciding with the 2008 housing market crisis may have been avoided. Had whistleblowers within Madoff’s firm come forward sooner, they could have helped to minimize the harm to investors and prevented the Ponzi scheme from growing out of control.

Second, timely reporting can help to protect the legal rights of the whistleblower. In order to qualify for a whistleblower award, whistleblowers are generally required to file a complaint within a certain timeframe under the False Claims Act and other whistleblower laws. For example, whistleblowers generally have six years from the date of the violation to file a complaint under the False Claims Act. If the government is already aware of the violation, the whistleblower may have even less time to file a complaint. If a whistleblower fails to file a complaint within the required timeframe, they may forfeit any potential recovery. In addition, to qualify for a whistleblower award in any case, the whistleblower must generally be the first person to file the case.  So, if a colleague reports it before you do, by even a single day, they may be eligible for a whistleblower reward and you will not be. 

Third, timely reporting can improve the chances of a successful whistleblower case. As time passes, relevant evidence is lost or becomes stale, and witnesses become less reliable. Consequently, a fraud case becomes more difficult to prove the longer the whistleblower waits before bringing a case. Whistleblowers can help preserve evidence and increase the chances of a successful case by reporting misconduct as soon as possible.

How to Timely Report Fraud

If you suspect that your employer or another company is engaging in fraudulent or illegal activities, it’s important to take immediate action. Here are some steps you can take to ensure timely reporting:

Consult with a Whistleblower Lawyer

When you first learn of fraud or other misconduct at your company, your first step should be to consult with an experienced whistleblower lawyer from a whistleblower law firm like Brown, LLC, as soon as possible. Experienced whistleblower attorneys can help you understand your legal rights and obligations, as well as advise you on the best course of action to preserve your rights.

File your case properly

It is crucial to file as soon as practicable. This is because many whistleblower statutes, like the False Claims Act, provide that, to be eligible for a whistleblower award, the whistleblower be the first person to file a case. In other words, if anyone else at your company files the same claim even one day before you do, you could lose your right to receive any award. Whistleblower attorneys are keenly aware of the “first to file” requirement, and will work with you to prepare the documents for prompt filing that still requires vetting the facts and the law and putting the complaint in a logical format that can potentially survive the rigors of the 9(b) pleading standard. 

In addition, the manner of reporting fraud and filing your case is as important as the timing. To be eligible for an award, whistleblowers must follow specific reporting procedures and file claims in the appropriate venue and with the correct government agencies. For example, under the False Claims Act, whistleblowers must file a complaint in federal court under seal and provide the government with a detailed description of the alleged misconduct. Whistleblowers may also be required to cooperate with the government’s investigation and provide additional evidence as needed.

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Gather Evidence

You should not undertake gathering evidence before you retain a whistleblower law firm or else it may land you in trouble.  While it’s important to gather as much evidence as possible to support your case, gathering information in the wrong way or trying to access information you’re not entitled to view may create legal problems for you, so you should retain whistleblower counsel first.  The types of information your whistleblower attorney may ask you to gather may include documents, emails, financial records, or other types of evidence that can support your claims. Digging into documents or files without authorization can alert the company of the impending whistleblower action, and also may lead to potential exposure or liability for theft or misappropriation of confidential information. An experienced attorney can also guide you through the evidence-gathering process.

Whistleblower Reporting Protections

To encourage whistleblowers to come forward and report misconduct, several laws provide legal protections to whistleblowers. For example, the False Claims Act and other whistleblower laws prohibit employers from retaliating against employees who report misconduct. Retaliation can take many forms, including termination, demotion, harassment, or other adverse employment actions. If you experience any form of retaliation, you may have legal recourse to seek compensation and other remedies.  But, for example, if you are reporting something like systemic Medicare Fraud, Medicaid Fraud, Defense Contractor Fraud or Pharmaceutical Fraud, the case is initially filed confidentially under seal which inherently will protect your identity from the Defendants.  Other statutes like the AML whistleblower statute (Anti-Money Laundering), SEC whistleblower, NHTSA whistleblower, CFTC whistleblower statutes may provide anonymity from start to finish with the use of a whistleblower attorney.  

The Impact of Timing on Whistleblower Awards

The importance of timely reporting cannot be overstated in whistleblower cases. By reporting misconduct as soon as possible, whistleblowers can help prevent further harm and increase the chances of a successful investigation and recovery. Waiting too long to report can make it more difficult for the government to gather evidence and build a strong case or extinguish your rights altogether.

Delay in reporting can also lead to missed opportunities for the whistleblower to claim a reward. The False Claims Act provides that only the first whistleblower to report a case of fraud is entitled to a percentage of the recovery, if any. 

Timely reporting is crucial in whistleblower cases. By promptly reporting misconduct, whistleblowers can protect themselves and others from further harm, increase the chances of a successful investigation, and maximize their chances of receiving a significant reward. It is also important to consult with an experienced whistleblower lawyer as soon as possible to ensure that your rights are protected and that you comply with all reporting requirements.

Brown, LLC is a law firm with significant experience in representing individuals in various legal matters. With a nationwide whistleblower presence, the firm is led by Jason T. Brown, a former FBI Special Agent, who brings a wealth of qui tam experience to the practice. Our attorneys are committed to fighting for our clients’ rights and achieving the best possible outcome in every case. Our firm handles a wide range of legal matters, including Anti-Money Laundering whistleblower, False Claims Act whistleblower, SEC whistleblower, IRS Tax Fraud whistleblower with a focus on client service and a proven track record of success.  Please contact Brown, LLC for a free confidential consultation on your potential whistleblower case.