Understanding the Basics of Whistleblower Legislation

October 30th, 2018 by Mike Bothwell

What are the basics of whistleblower legislation, and how does it relate to you?

Basics of Whistleblower LegislationWhistleblower legislation isn’t a modern invention. It arose from corruption in the 19th Century, particularly as predatory companies scrambled to take advantage of government expenditures made during the Civil War. Fighters on both sides of the conflict were at a loss for essential supplies, from boots and jackets to edible food.

Companies contracted to provide the goods failed to deliver or dispensed products of such poor quality they were worthless. Widespread fraud directly contributed to deaths on the battlefield.

Establishing the ‘Lincoln Law’

President Abraham Lincoln is famous for many things, but one of his lasting achievements was the passage of the False Claims Act (FCA). Sometimes called the “Lincoln Law” in his honor, the act gives individuals the right to sue other people, businesses and organizations on behalf of the United States when they are guilty of defrauding government programs. Not only does it stop the crime from happening, it also gives the individual a chance to share in settlement or judgment payments.

Litigation doesn’t stop there. It’s important for fraud reporters to know criminal charges often accompany these lawsuits. A recent example is the owner of Texas-based Houston Healthcare Clinics, found guilty of Medicare fraud. The FCA case resulted in fines of $2.7 million and a 36-month prison sentence.  

The FCA has played a central role in breaking up corruption in all major industries. Inappropriate military spending was a hot topic in the 1880s and again in the 1980s. In previous decades, financial mismanagement was all the rage. Today? Whistleblowers are using the False Claims Act to force changes in the healthcare industry and stop companies from taking advantage of our most vulnerable populations.

How Is Fraud Uncovered?

One of the reasons Medicare fraud is on the rise is because of how easy it is to get away with it. Many times, patients are in no position to go over their insurance statements. Complicated rules regarding medical coding also make it difficult for a patient to know whether they’re billed correctly.

Many of the whistleblowers filing suit under the FCA are employees of companies committing fraud or their partners. A clinical social worker who noticed an ambulance company was providing transportation for patients at a premium sued the company and collected roughly $160,000 from the settlement. She helped her finances, but more importantly, she stopped the company from taking advantage of her patients and the Medicare program.

In other cases, secondary victims uncover the problem and speak out. In Florida, former medical director and whistleblower Dr. John Simons discovered his signature on paperwork he didn’t sign. Also from Florida, Dr. Donna Bell discovered a medical supply company was using her credentials to forge prescriptions for medical equipment to patients who weren’t in her care.

Rarely do victims have the knowledge or know-how to fight fraud impacting their bank accounts and their quality of life. It is up to people in the industry to keep businesses honest.

Why Is the Fair Claims Act So Effective?

The Fair Claims Act offers whistleblowers the best of both worlds. On one hand, you’re able to guide the hand of justice and reap the rewards. Some fraud reporters receive tens of millions of dollars for their role in stopping government-related fraud.

In May 2018, the U.S. Securities and Exchange Commission awarded three whistleblowers a combined total of $83 million. That’s larger than most lottery winnings. But it didn’t happen by accident. The law rewarded the individuals for tipping off the SEC about fund mismanagement at Merrill Lynch.

The promise of financial reward is essential to convincing some people to come forward. Why? Because of the risks involved in outing crime.

The federal and state governments have laws to protect whistleblowers from harassment, demotion, dismissal, blacklisting and other forms of retaliation. Sometimes these laws only apply to public workers. In few areas do they extend to all employees. In False Claims cases, you might have fewer options.

Looking for Legal Protection?

It’s helpful to work with a competent legal team who understands whistleblower protections. How you report on problems makes all the difference.

A court dismissed the case of Kathy Reitzel, former finance director for the Keys School District in Florida. In 2009, the school board forced Reitzel to retire early after she outed the district’s director of adult education for embezzlement. Monique Acevedo, the wife of then-superintendent Randy Acevedo, racked up over $400,000 in personal charges on the school’s accounts.

Unfortunately, Reitzel had knowledge of the embezzlement in 2007. She went to the superintendent to deal with the matter privately. If she’d gone through the proper channels, the school board said, Reitzel would have saved the district a significant amount of money — and her job.

Having guidance when navigating whistleblower laws will ensure you stop wrongdoings without putting yourself at excessive risk.

Contact the experienced whistleblower legislation attorneys at Bothwell Law Group by clicking or calling 770.643.1606 today.

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