Consumer Fraud

Whistleblowers key in the fight against fraud

Whistleblowers have become one of the federal government’s most valuable tools in its ongoing efforts to crack down on corporate wrongdoing and recover money lost to overbilling and other fraudulent activities.

Healthcare is one industry that is particularly rampant with financial fraud, and it’s fallen at the center of recent bipartisan efforts in Washington to fight back. A congressional coalition beefed up the False Claims Act in 2009, making it easier for the government to use the law. Additionally, the Obama Administration has called for better fraud-busting health care laws and a bigger budget to use them effectively.

Tony West, an assistant attorney general in the U.S. Justice Department’s civil division, told USA Today that this strategy, which involves better protections for corporate whistle-blowers, is a good one; for every dollar spent fighting fraud, the government recovers $7 – up from $5 per $1 spent just three years ago.

The Justice Department has been able to reclaim $16 billion in federal health care cases using whistleblowers, and nearly 40 percent of that sum has been recovered since 2009, USA Today reports. Last year, the federal government “broke all records,” recovering nearly $2.3 billion “in whistle-blower settlements and judgments,” according to USA Today. This success can be attributed to whistleblowers, according to Mr. West, which he said the government has started using “very, very aggressively.”

On average, the government recovers three times more money in whistleblower cases than in its non-whistleblower cases.

That’s because whistleblowers are usually credible witnesses with valuable inside information. Employees ordinarily report fraud to company managers, Mr. West explained. If the wrongdoings continue despite their efforts to stop it, frustrated employees turn to the government for help, in effect becoming whistleblowers.

Large health care fraud cases “often involve pharmaceutical companies either falsely advertising a product or marketing it for a use that hasn’t been approved by the FDA,” according to the USA Today report. But money isn’t the only thing at stake in the whistleblower cases the government chooses to pursue. In some cases, public health or safety may be at risk.

According to USA Today, in 2010, the Justice Department went after and recovered about $25 million from a dental group for performing unnecessary and expensive work that Mr. West described as “absolutely barbaric,” such as performing 16 unneeded root canals on one child in one sitting.

“It is respectable and honorable for Americans to step up and become a whistleblower,” says Beasley Allen attorney Andrew Brashier, who practices in the firm’s consumer fraud section. “The average American is the front line for stopping the waste of taxpayers’ money. Without their help, the people’s tax dollars would be lost forever to fraudsters who prey on the taxpayer.”

For more information about whistleblower laws, visit


USA Today