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Who Can Be a Whistleblower When There Is Defense Contractor Fraud?

When there is defense contractor fraud, anyone can be a whistleblower.

defense contractor fraudIn theory, anyone can be a whistleblower when there’s defense contractor fraud. It can be a janitor who overhears a conversation. Or, it could go all the way up to the chairman of the board of directors who decides he or she has had enough with the corruption and theft of taxpayer dollars.

But the real question isn’t who can be a defense contractor whistleblower. The real question is who can be a whistleblower. Additionally, who can collect the reward provided for in the qui tam provisions of the False Claims Act?

Who Are Defense Contractors?

Defense contractors are businesses that provide military products and services, usually to the federal government. Defense contractors include some of the biggest and most profitable businesses in the world. As the name implies, defense contractors enter into contracts with the federal government for any number of things, such as the personal defense of government officials overseas, firearms, tanks, ships, trucks, missiles and nuclear weapons.

Because of the size of these contracts, typically in the millions and often in the billions of dollars, there is ample opportunity for fraud and other improper gains.

What Is a Qui Tam Action?

A qui tam action is a lawsuit where an individual (whose legal name is “relator” and is usually the whistleblower) brings a lawsuit on behalf of the federal government. The purpose of the qui tam lawsuit is to recover money that an individual or organization illegally took from the federal government through fraud.

But the relator doesn’t bring the lawsuit merely because he or she is a good citizen. Rather, there is the potential for a sizeable reward. Specifically, the relator is eligible for between 15 percent and 30 percent of the federal government’s total recovery. This reward serves as strong motivation to entice would-be whistleblowers to step forward with information. Furthermore, it can motivate them to take the legal action necessary to help the federal government recover the stolen money.

Who Can’t Bring a Qui Tam Action?

As mentioned earlier, anyone can become a whistleblower. There may be legal consequences by revealing secret information or the lack of a reward in some instances. But the reality is that if an individual really wants to reveal a secret, there’s not much anyone can do to stop them.

As for bringing a qui tam action, almost anyone can bring it and serve as the relator, unless:

  • The relator played a role in the fraud. Plus, he or she already has a criminal conviction relating to the involvement in the fraud.
  • Another qui tam action relating to the same fraud already exists.
  • The federal government is already in a civil or administrative proceeding to recover the money stolen from the fraud.
  • The qui tam action relies on information already available to the public.

Who Typically Brings a Qui Tam Action Against Defense Contractors?

Even though anyone can be a whistleblower and almost anyone can be a relator in a qui tam action, the relator must have sufficient knowledge about the fraud. It’s not enough for the relator to just know that the defense contractor’s fraud exists. The relator will need detailed information. This includes which contracts are subject to the fraud, how much fraud took place, and the identity of key people responsible for it.

Additionally, the relator will probably need access to evidence of the fraud, such as e-mails, contracts, invoices, purchase orders or any other types of documents that put into writing the existence of the fraud. E-mails are often strong evidence that fraud exists because it can put the other documents into context and explain how the fraud works.

For example, if a purchase order shows the federal government bought 1,000 missiles for $1,000,000 each, but an invoice shows the federal government paid $1,100,000 for each missile, that doesn’t necessarily prove the defense contractor deliberately overcharged for each missile. But if there is an e-mail where the CEO boasts, “Hahaha, those stupid government suckers! They just overpaid $100,000 for each missile because they already agreed to a lower price, but they forgot about it. I wish we could always get away with overcharging the government!”

It’s Not Usually That Simple

In most situations, no such e-mail will exist. But if it did, it’s easy to see how it puts the purchase order and invoice into context. What might typically happen is that the relator will listen to, or take part in, incriminating conversations. Based on that information, the federal government will know who to investigate and question about the details of a specific contract.

But the government needs someone to point them in the right direction for who and what to investigate. That’s where the whistleblower or relator comes in. Based on the level of knowledge needed, the relator is probably going to be someone up on the chain of command within the company. Or they could be a person who has significant responsibility for the fraudulent contracts.

Have Information about Possible Defense Contractor Fraud?

Click to find out more about defense contractor fraud by contacting Bothwell Law Group online.