Defending Against Whistleblower Allegations
What You Need to Know When Confronting a Federal Whistleblower Complaint
Whistleblower allegations are serious. In many cases, these allegations present substantial risks for corporate entities and their owners, executives, and employees. Whistleblowers can file complaints under numerous federal laws, and the relevant authorities can pursue civil or criminal enforcement action depending on the circumstances presented. When facing whistleblower complaints, companies and individuals must quickly take appropriate steps to protect themselves, as failing to do so can have severe consequences.
At Spodek Law Group, we provide legal representation for companies and individuals facing whistleblower allegations across the country. This includes providing representation in whistleblower litigation and federal enforcement proceedings involving the Internal Revenue Service (IRS), U.S. Department of Health and Human Services Office of Inspector General (DHHS OIG), U.S. Department of Justice (DOJ), U.S. Securities and Exchange Commission (SEC), and other federal authorities. Our attorneys and consultants have extensive experience in all aspects of federal law enforcement and litigation, and we rely on this experience to vigorously defend our clients.
5 Steps to Take When Facing a Federal Whistleblower Complaint
If you are facing a federal whistleblower complaint, it is imperative that you engage experienced legal counsel immediately. This is the first—and most important—step toward protecting your company and yourself. If you are facing a federal whistleblower complaint, here is what you need to know about the other steps involved in building an effective defense:
1. Determining (and Eliminating) the Source of the Whistleblower’s Allegations
One of the first steps toward defending against a federal whistleblower complaint is determining who filed it. In most cases, this will involve identifying the whistleblower as either an employee of the company or a third party. Once you identify the whistleblower, your defense counsel will need to gather any information the whistleblower may have in their possession. Depending on when you hire defense counsel, this may involve preserving the whistleblower’s computers or other electronic storage media.
2. Conducting an Internal Investigation
Once you know who filed the complaint and have identified (and preserved) any relevant evidence in their possession, your defense counsel will need to conduct an internal investigation. Whether your company is facing allegations of tax fraud, securities fraud, healthcare fraud, or any other federal offense, conducting an internal investigation is a key step toward determining what specific allegations the federal government can substantiate (and what it cannot). After the investigation, your defense counsel will be able to formulate a comprehensive response to the whistleblower’s complaint.
3. Determining Whether (and When) to Disclose to the Government
Depending on the circumstances at hand, it may be necessary to disclose to the IRS, DHHS OIG, DOJ, SEC, or another federal agency. While companies have an obligation to disclose in some circumstances, there are also circumstances in which disclosure is not necessary. At Spodek Law Group, we have advised numerous clients regarding if, when, and what to disclose to the federal government in light of the allegations at issue. When disclosure is necessary, we advise our clients regarding the best time and method for making the necessary disclosure.
4. Determining the Best Way to Fight the Whistleblower’s Allegations
With a clear understanding of the whistleblower’s allegations and whether a disclosure to the federal government is necessary, your defense counsel will be able to determine the most effective strategy for fighting to protect you and your company. Depending on the circumstances, this could involve a wide range of possibilities—from affirmatively disputing the whistleblower’s allegations to challenging the government’s investigative methods and the admissibility of various forms of evidence in court.
5. Deciding How to Handle the Whistleblower
At the appropriate time, your defense counsel will also advise you regarding how to handle the whistleblower directly. This will require a delicate approach—while it is possible to terminate or pursue litigation against the whistleblower under appropriate circumstances, companies must be very careful to avoid engaging in unlawful retaliation.
Defense Strategies in Federal Whistleblower Cases
In federal whistleblower cases, there are a variety of potential defenses available. Here are some examples of defenses we may be able to assert on your (or your company’s) behalf:
- Lack of Evidence – If the whistleblower’s allegations are unsubstantiated, this alone can be enough to avoid civil or criminal law enforcement action.
- Exclusion of Evidence Seized During the Government’s Investigation – If the government seizes evidence during its investigation without sufficient justification, any evidence it seizes may be inadmissible in subsequent civil or criminal proceedings.
- Mistake – When facing whistleblower litigation or federal enforcement action, companies can face substantial penalties for both intentional and unintentional violations. However, companies are not strictly liable for innocent mistakes. If a federal whistleblower’s allegations stem from an honest mistake, this can serve as a defense in civil and criminal proceedings.
- Insufficient Evidence of Intent – In criminal cases and cases involving allegations under the False Claims Act, the government has the burden of proving intent. If the government cannot meet its burden of proof, it cannot secure a conviction or judgment on behalf of the federal government.
- Good-Faith Compliance Efforts – Along with challenging the government’s evidence, companies can also defend against federal whistleblower allegations by showing that they have made good-faith efforts to comply with the law. For example, if a company can show that it has adopted an effective compliance program and taken the necessary steps to ensure that its personnel follow the relevant rules and regulations, this can help to mitigate the company’s risk in the event of a federal whistleblower complaint.
FAQs: Facing a Federal Whistleblower Complaint
Why Do I Need to Engage Defense Counsel for a Federal Whistleblower Complaint?
When facing a federal whistleblower complaint, engaging defense counsel is vital to protecting your interests. To defend against a whistleblower’s allegations, you need defense counsel who can conduct an investigation, assess your (or your company’s) exposure, and determine the best path forward. Defense counsel who have specific experience handling federal whistleblower complaints will be able to provide advice and representation tailored to your unique circumstances.
What are the Risks of Facing a Federal Whistleblower Complaint?
The risks of facing a federal whistleblower complaint depend on whether the complaint targets a civil or criminal enforcement action. In civil enforcement cases, companies can face significant fines and other penalties, while individuals can face fines, loss of professional licensure, and other consequences. In criminal cases, companies and individuals can face statutory fines and imprisonment.
What if a Whistleblower’s Allegations are Unsubstantiated?
If a whistleblower’s allegations are unsubstantiated, this can serve as a complete defense in civil and criminal proceedings. But, to be sure of this, you must conduct a comprehensive internal investigation. When facing a federal whistleblower complaint, it is not safe to assume that the allegations against you or your company are unsubstantiated. Instead, you need to make sure you are making informed decisions every step of the way.
Do Whistleblowers Get Paid for Filing Complaints?
Whistleblowers can receive substantial financial compensation for filing complaints with the IRS, DHHS OIG, DOJ, SEC, and other federal authorities. In some cases, whistleblowers can receive compensation of up to 30% of the total amount the federal government recovers. As a result, companies need to assume that whistleblowers will be highly motivated to file all complaints that are even arguably valid.
What if the Federal Government is Targeting Me (Or My Company) Based on a Whistleblower’s Allegations?
If the federal government is targeting you or your company based on the allegations in a whistleblower’s complaint, you will need to engage defense counsel to represent you in the government’s investigation. At this point, you are facing civil or criminal penalties, and you need to fight to protect yourself (or your business) from severe consequences.
Speak with a Federal Defense Lawyer at Spodek Law Group
If you need defense counsel for a federal whistleblower complaint, we encourage you to contact us promptly. To speak with a federal defense lawyer at Spodek Law Group in confidence, please call 212-300-5196 or tell us how we can reach you online today.
