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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.

Can a Whistleblower Law Firm Help Me in a Defense Contract Fraud Case?

whistleblower law firm

whistleblower law firmMany do not understand the purpose and capabilities of a whistleblower law firm. Not only do whistleblower attorneys have the ability to defend in qui tam cases, but such lawyers can also serve as a fortification in instances where defense contract fraud exists.

About Defense Contract Fraud

Defense contract fraud occurs when a private entity sells faulty goods to the government at ridiculously high marked prices. Selling cheap weaponry for three times its worth to armed forces could fall under defense fraud.  For example, if the seller intentionally invoiced the items at above market price for the sole purpose of making an additional profit.

Rules regarding contracts between government entities and private companies were first put in the books during the Civil War. It was during this time that the uniform store that the armed forces used to clothe its men began using cheap fabric that did not endure the pressures of war. The company charged the government prices that one would pay for quality fabric all while using material that easily ripped. As a result, executives in parliament added a section to the False Claims Act that sought to protect and reward citizens who blew the whistle on companies that operated under such unfair practices.

Determining a Case for Fraud with a Whistleblower Law Firm

Typically a contracted company will attempt to take advantage of its government agency agrements in one of three ways:

  1. The company will cross-charge the agency. Instead of simply invoicing a flat fee for services, a business may charge a standard fee plus hourly wages. Companies that operate this way tell employees to log time after charging the government fees that are meant to cover hourly wages.
  2. The business will substitute products. Such substitutions tend to be at the expense of the government. Instead of using a high-quality material as stipulated in the agreement, the company will cut corners to save money. The government, in essence, suffers due to paying more money for products that will last half the time.
  3. The business will not properly allocate time spent between working for the government and another company. This form of defense contract fraud usually occurs when the project requires a partnership between the government and a corporation. Instead of recording time spent working for the two entities separately, the company in question may invoice the government for all hours worked. Such action leaves the government paying for the entire job even though another company shared in expenses incurred.

The Importance of the Whistleblower in Defense Contract Fraud

Millions of taxpayer dollars go to companies that use devious practices to receive pay from the government. An individual who sounds the alarm on such practices saves the country money.  They also assist in helping funds go to more deserving programs in defense. A whistleblower law firm can help in fighting fraud by connecting citizens with experienced counsel that can conduct thorough research.

Are you aware of defense contract fraud and need to know how to proceed? Learn more about what whistleblower law firms can do for you by contacting Bothwell Law Group today.