TYPES OF FRAUD REPORTED BY WhistleblowerS

Pharmaceutical fraud involves dishonest manufacturers engaged in various types of misconduct involving the manufacture, marketing or sale of prescription drugs.  When government-funded healthcare programs, like Medicare and Medicaid, make payments based on  fraudulent conduct, a pharmaceutical company can face enormous liability under the False Claims Act.

The federal government spends billions of dollars annually on goods and services for everything from office furniture to fighter jets.  Dishonest contractors exploit vulnerabilities in the procurement process to enrich themselves at the expense of U.S. taxpayers.  The government relies on whistleblowers to report information involving fraudulent conduct, such as kickbacks, bid rigging and price fixing, as these schemes can be very difficult to detect without insider information.

Unscrupulous healthcare providers submit fraudulent claims for payment to government-funded healthcare programs like Medicaid and Medicare.  Studies show 10%  of annual healthcare costs pay for such illegitimate claims. Fraudulent healthcare schemes include falsification of records or claims, upcoding, billing for services not provided, and kickbacks.  Medical providers submitting fraudulent healthcare claims can be liable for treble damages, penalties and other costs.

The Foreign Corrupt Practices Act makes it unlawful for certain categories of individuals and entities to pay foreign government officials to assist in obtaining business.  The anti-bribery provisions of the Act apply to all U.S. persons as well as certain foreign issuers of securities.  The Act also requires companies whose securities are listed on a U.S. exchange to keep records that accurately reflect the transactions of the corporation and maintain an adequate system of internal accounting controls.

The SEC and CFTC whistleblower programs provide monetary awards to whistleblowers who voluntarily provide information involving violations of federal securities laws that fall within the agencies’ authority.  An individual or entity engaged in deliberate conduct designed to mislead investors, falsify financial statements or create artificial price movements in the market can result in liability for violating the Securities Exchange Act of 1934 or the Commodity Exchange Act.

The IRS Whistleblower Program allows individuals and companies to report violations of the tax code, including underpayment or nonpayment of taxes, as well as other types of illegal tax evasion schemes.  When an eligible whistleblower submits information that results in a recovery of more than $2 million, the IRS will pay an award of between 15 and 30% of the proceeds collected. The Taxpayer First Act of 2019 provides protection from retaliation for whistleblowers who submit information through the IRS Whistleblower Program.