The law continues to reward whistleblowers who fight fraud

The courts have long recognized the vital role that whistleblowers play in the nation’s system of justice. Without the assistance of whistleblowers, significant and costly legal violations would happen without any meaningful accountability for the lawbreakers. Therefore, both Congress and State legislatures have adopted an array of laws that protect whistleblowers from being retaliated against or otherwise experiencing discrimination because they had the courage to report apparent wrongdoing.

To encourage whistleblowers to report evident violations, the law enables whistleblowers to recover back pay, back benefits, emotional distress damages, punitive damages, civil penalties, attorney’s fees, and litigation costs. Minnesota’s whistleblower law provides a prime example of how whistleblowers effectively serve as private attorneys general. The Minnesota Legislature recently amended the law to make it even easier for whistleblowers to be protected and to prove their claims of retaliation. Federal law provides similar protections and remedies, as illustrated by the Sarbanes-Oxley Act, 15 U.S.C. §§ 7201, et. seq., and the Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 U.S.C. §§ 5301, et. seq., adopted after the corporate-caused economic meltdown during the George W. Bush Administration.

When the legal violations involve defrauding the government, the law provides even more powerful protections to, and remedies for, whistleblowers. The Federal False Claims Act, 31 U.S.C. §§ 3729, et seq., and the Minnesota False Claims Act, Minn. Stat. §§ 15C.01, et seq., each authorize the trebling of damages. In other words, if a defendant has committed $1 million in fraud, the recovery can be $3 million – plus up to $11,000 for each individual fraudulent representation or other similar submission to the government. A whistleblower in a case filed under the Federal False Claims Act and/or the Minnesota False Claims Act can receive up to 30 percent of the government’s recovery as well as attorney’s fees, litigation costs, and compensatory and punitive damages if the whistleblower has experienced retaliation due to the whistleblower’s protected activity – that is, reporting the apparent violation of law.

In conjunction with the United States Department of Justice and the Office of the Minnesota Attorney General, Cummins & Cummins, LLP recently prosecuted fraud claims under both the Federal False Claims Act and the Minnesota False Claims Act. In that case, Cummins & Cummins, LLP’s whistleblowing client and the Federal and State authorities alleged that the defendants billed Medicaid for services not actually provided and, moreover, did not provide the required clinical supervision of therapeutic services for adults and children with autism and other mental challenges. After litigating the case for over a year, the defendants agreed to a settlement requiring the payment of nearly $6.4 million. Although that case has concluded, Cummins & Cummins, LLP remains committed to combatting fraud and otherwise helping other whistleblowers uphold the rule of law going forward.