February 20th is National Whistleblower Reward Day. The day was created by former Department of Justice Attorney Joel Hesch to bring attention to the importance of whistleblower reward programs. The False Claims Act is the foundation of the U.S. whistleblower system, and by far the most widely used statute by whistleblowers to report corporate fraud and misconduct. Since 1986, the Department of Justice has recovered over $40B in False Claims Act cases brought by whistleblowers.
Often referred to as the Lincoln Law, the statute was enacted in 1863 to fight widespread fraud by companies selling rotten food, sickly mules, and defective weapons to the Union Army during the Civil War. The law allows private citizens, known as relators, to bring a lawsuit on the government’s behalf, rewarding them with a significant portion of the government’s recovery (between 15% and 30%). The law is rooted in thirteenth-century England’s tradition of the qui tam, derived from a Latin phrase meaning “he who sues on our Lord the King’s behalf as well as his own.”
The cornerstone of a whistleblower claim under the False Claims Act is proof that fraud or misconduct caused the government to suffer a financial loss, such as the government overpaying for a product or service, paying for a product or service it did not receive, or paying for a product or service that is substandard or otherwise different from what the government agreed to purchase.
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