RULE 16
Follow the Money
Introduction
Fraud can be both profitable and detrimental to market competition. However, companies may be deterred by the fear of detection, driven by whistleblower reward laws that target the very greed behind such practices.
From the 1863 False Claims Act to the 2023 updates to the Anti-Money Laundering Act, Part III of Rules for Whistleblowers guides you through the various laws, agencies, forms, and filing procedures required for an effective disclosure and demonstrates the potential for a significant whistleblower reward.
Practice Tips
- Checklist 1, found at the end of Rules for Whistleblowers, offers a list of federal, state, and local qui tam laws, along with their official legal citation.
- Reward laws are complex. They have very specific filing requirements. You must pay careful attention to the rules governing each law, as a minor mistake can cost a whistleblower millions. How to use these laws are explained in Rules 17-25, along with the tools and warnings explicated in Rules 2-15.
Resources
The legislative history of the FCA is set forth in three critically important Senate Reports. The first explains in detail the history of the FCA and the impact of the 1986 amendments that revived the law:
This Senate Report remains the most authoritative source for interpreting the FCA.
A second major source of information is the legislative history of the False Claims Act Correction Act of 2008:
Although this law did not pass, many of its provisions were approved (either in whole, in part, or in a modified form) by Congress in three separate laws:
- Fraud Enforcement and Recovery Act, Public Law No. 111-21, § 4 (May 20, 2009)
- Patient Protection and Affordable Care Act, Public Law No. 111-148, § 10104(j)(2) (Mar. 23, 2010)
- Dodd-Frank Act, Public Law No. 111-203, § 1079A (July 21, 2010)
The third report explains the meaning of the FCA amendments included in the Fraud Enforcement and Recovery Act of 2009:
U.S. Department of Justice, Civil Division, Fraud Statistics—Overview:
- Oct. 1, 1987–Sept. 30, 2021. These statistics are updated annually (2022 coming soon).
The early legislative history of the FCA can be found at:
- The Congressional Globe, 37th Cong., 3rd Sess., pp. 952–58 (1863)
- “Report of the House Committee on Government Contracts,” March 3, 1863
- H. R. Rep. No. 2, 37th Cong., 2nd Sess., pt. ii—a, pp. xxxviii–ix (1862)
President Lincoln signed the original FCA into law on March 2, 1863:
- U.S. Statutes at Large, 37th Cong., Sess. II, Chapter LXVII (Mar. 2, 1863)
On April 1, 1943, the House voted to repeal the FCA. The repeal would have been readily approved but for a prolonged filibuster by Senator William Langer (Rep., N. Dak.). During the filibuster Senator Langer put into the Congressional Record information on the legislative purposes and cases pending under the FCA:
- Volume 89 of the Congressional Record, Senate debates between July 8 and December 17, 1943
Langer’s central arguments in opposition to repealing or gutting the FCA are set forth in:
- “Minority Views” to Senate Report 291, Part 2, 78th Cong., 1st Sess. (June 25, 1943)
- Congressional Record on pp. 7437–45 (July 8, 1943), pp. 7576–79 (Sept. 15, 1943), pp. 7601–7 (Sept. 17, 1943)
Senator James Murray (Montana) also spoke out against the repeal:
- Congressional Record pp. 7575–76 (Sept. 15, 1943), pp. 7609–10 (Sept. 17, 1943)
Senator Joel Bennett Clark (Missouri) also condemned the repeal:
- Congressional Record pp. 7611–14 (Sept. 17, 1943)
In the House of Representatives, Congressman Vito Marcantonio (New York) and Louis Miller (Missouri) opposed the repeal:
- Congressional Record pp. 10846–49 (Dec. 17, 1943)
Based on Langer’s actions the FCA was not repealed, but instead severely weakened. The amendments gutting the law were approved by Congress and signed into law by President Roosevelt on December 23, 1943:
The Bradley Birkenfeld story has been widely reported in the international press:
- Michael Bronner, “Telling Swiss Secrets: A Banker’s Betrayal,” Global Post (Aug. 5, 2010)
- Juan Gonzales, “UBS Whistleblower Bradley Birkenfeld Deserves a Statue on Wall Street, Not Prison Sentence,” New York Daily News (Jan. 6, 2010)
- David Hilzenrath, “Beware the Whistle: A Swiss Banker’s Saga Offers a Cautionary Tale,” Washington Post (May 16, 2010)
The exchange between the court and the federal prosecutor is contained in the Sentencing Transcript:
- U.S. v. Birkenfeld, 08-60099-CR-Zloch (U.S. Dist. Court, S.D. Florida) (Aug. 21, 2009)
Praise for the False Claims Act
“The False Claims Act has provided ordinary Americans with essential tools to combat fraud, to help recover damages, and to bring accountability to those who would take advantage of the United States government—and of American taxpayers.”
“The False Claims Act is the gift that keeps on giving. It’s often difficult to quantify the value of whistleblowers, but in this case, they have held the government accountable and helped saved taxpayers over $70 billion. Whistleblowers go out of their way to root out fraudulent and abusive uses of your hard-earned tax dollars. They’re absolutely essential to fighting fraud, and the Justice Department ought to continue empowering them to prevent swindlers from getting away with defrauding American taxpayers.”
Frequently Asked Questions
Related Rules
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