According to a recent study published by Andrew C. Hall, Gerald S. Martin, Nathan Y. Sharp and Jaron H. Wilde, when qui tam whistleblowers participate in financial misrepresentation enforcement actions, the wrongdoers face significantly increased penalties and prison time.
The study’s authors analyzed over a thousand qui tam financial fraud enforcement actions between 1978 and 2012 and determined 145 cases (almost 13% of the total) involved whistleblower information. Due to whistleblowers’ assistance, the government obtained an additional $20.75 to $21.27 billion in judgments, the study estimates. Prison sentences for guilty corporate executives and managers also increased by roughly two years when qui tam whistleblowers were linked with the enforcement action.
Qui tam whistleblowers “are a valuable source of information for regulators in the investigation and prosecution of firms and their managers,”says the study’s authors. In addition to increased penalties and prison time, whistleblower involvement increases the efficiency of fraud investigations and the ability to identify financial fraud schemes early on. Qui tam whistleblowers and qui tam actions also serve as a deterrent to future financial fraud violations.
Whistleblowers who come forward to report fraud are truly heroes fighting to recover ill-gotten gains for the general public; their efforts must be supported. This study provides ample evidence to further support whistleblower programs targeting financial fraud, and to bolster qui tam whistleblower programs generally. As those in the whistleblower community have long held, this type of integrity is invaluable.
If you are aware of financial fraud or government contracting fraud, and are looking for a qui tam attorney, Behn & Wyetzner, Chartered has years of expertise in this unique area of whistleblower law. Please feel free to contact us.