Criminals get creative in seeking out new and improved methods to rip off the government and steal our taxpayer dollars for their own benefit, and when a business competitor engages in fraud, waste or abuse, America’s industrious, law-abiding companies suffer. Authorities don’t always have the necessary resources to put a stop to illegal acts by companies.
That’s where the federal False Claims Act (FCA) comes in. The government is willing to pay individuals with original knowledge of fraud against government funded programs to come forward. These cash whistleblower awards often fall in the millions of dollars, helping to offset the damage caused by competing companies who chose to violate the law to gain the upper hand in the industry.
Whistleblower Salina Savage Stands Up to Allegedly Scheming Competitors
Salina Savage recently filed a whistleblower claim against two competitors for allegedly creating fake businesses to get small disadvantaged business funding, taking advantage of the HUBZone program that gives preference to businesses that employ people living on Native American reservations.
One alleged fake business collected a large chunk of a federally funded $4.5 billion Hanford nuclear site cleanup grant - funding that Savage and other legitimate women-owned businesses are competing for. The defendants moved to dismiss the case in October, but lost, and Savage is still lined up to level the playing field as the case continues.
Kevin Carlisle’s ambulance company couldn’t compete with other ambulance companies - not because those competitors were better or more efficient, but because they were allegedly cheating Medicare by paying unlawful kickbacks and offering illegal discounts.
Kevin Carlisle filed a whistleblower claim against five Southern California ambulance companies and under the False Claims Act he was awarded $1.7 million of the $11.5 million settlement payment as a reward for reporting fraud.
Anti-Dumping Violations Popular with Fraudsters
Know of a competitor company making false statements to avoid paying customs duties? Companies who introduce goods into the U.S. have to pay anti-dumping duties as a means to protect domestic companies and American workers from unfair competition abroad. Quite a few American fraudsters choose not to comply, allowing them to sell their products for less, and many competitor businesses aren’t putting up with it.
An Indiana-based college dorm furniture manufacturer, University Loft Co., decided to file a whistleblower claim against its Texas-based competitors, University Furnishings LP and Freedom Furniture Group, Inc., alleging they avoided paying anti-dumping duties on furniture produced in China by passing it off as office furniture.
Multi-Million Dollar Whistleblower Awards for Reporting Corrupt Competition
University Loft was awarded $2.25 million as a whistleblower cash reward for exposing the illegal activity, part of the $15 million settlement reached with University Furnishings.
In a similar case, John Dickson, a domestic producer of carbazole violet pigment 23 (CVP23), collected over $7.8 million for blowing the whistle on Japan-based competitor Toyo Ink and its New Jersey and Illinois affiliates. These guys also made CVP23 and allegedly represented it to US customs as having been made in Mexico and Japan rather than the actual China and India production, bringing down their required duties. Dickson collected a $7.8 million whistleblower cash award of the $45m settlement the U.S. government reached with Toyo.
Electrode manufacturer, Graphite Electrode Sales Inc., gained knowledge that its competitor, Ameri-Source, was allegedly evading customs duties by reporting the electrodes it imported from China as larger in diameter than they actually were, thereby avoiding paying duties that only apply to small diameter graphite electrodes. The government recovered $3 million in stolen money by settlement and rewarded Graphite Electrode Sales with $480,000 for its efforts.
The cash award offered to whistleblowers by the FCA acts as incentive to come forward. The Department of Justice handed out $435 million in whistleblower awards in 2014 alone. And most False Claims Act attorneys work on contingency, meaning you don’t pay the lawyer unless you collect an award.
Honest folks may feel throwing their competitors under the bus with a whistleblower suit is a bit harsh. But remember this… cheating competitors aren’t only harming you and your family, they are hurting every other individual and family in your industry who can’t support themselves amongst illegal and unfair competition. Whistleblowers are true American heroes. Don’t hesitate to consider filing a claim if you suspect illegal activity.