Report Fraud Anonymously
Ways to File a Confidential Whistleblower Case
There are two primary methods used by whistleblowers to file a confidential False Claims Act case, both of which have upsides and downsides. Ultimately, because a False Claims Act Case is usually filed in federal court, and will at some point be unsealed and litigated, if it is not dismissed beforehand, there is no fool proof way to remain completely confidential when filing a False Claims Act case. Furthermore, in addition to their individual deficiencies, none of these strategies can completely prevent a whistleblower from being exposed due to the specificity requirements of the complaint or a potential settlement.
Because the pleading requirements under the False Claims Act require detailed facts as to the underlying fraud, there will always be the possibility that a company will be able to discern the whistleblower’s identity simply by reading the facts of the complaint and understanding what that person knew.
LLPs and LLCs
Some whistleblowers form limited liability partnerships (“LLP”) or limited liability companies (“LLC”) in Delaware to protect their identity. The goal is to create only a link to the LLP or LLC, not to the individual whistleblower or whistleblowers. Thus, when the case is filed, only the LLP or the LLC’s name is listed on the complaint, and, if and when the case is unsealed, only the identity of that entity can be traced.
Confidentiality, however, is not be complete since the whistleblowers will be required to disclose their identity to the Government as it investigates their case and collects information from them. Further, if the case is unsealed and litigated, whistleblowers are likely to become witnesses, and will be required to reveal their identity. Accordingly, the only true benefit of this strategy is that the whistleblowers may dismiss the case before it is unsealed, and thus, never have their true identity exposed. A downside to this strategy, on the other hand, is that an argument can be made that actual LLP or LLC does not have the requisite direct and personal knowledge of the allegations in the Complaint, as opposed to the individual whistleblowers. Some courts have adopted this theory, especially if the LLP or LLC was formed after the Complaint has been filed.
File As John Doe
Whistleblowers also file cases as John Doe, as opposed to filing under their true name. Under this strategy, while the whistleblower does not have the potential direct and personal knowledge pitfall as with a LLP or LLC, he or she will ultimately still have to disclose their identity to the Government and will likely become a witness at some point during the course of the litigation. When the case is unsealed, however, the name on the complaint remains John Doe, thus providing the whistleblower’s identity with some moderate protection from people searching PACER or other court documents. However, the Defendant’s first discovery request is to ask for the identity and position of the John Doe.
Confidentiality Under The SEC Whistleblower Program
Unlike the False Claims Act, a submission made under the SEC Whistleblower Program is not filed in federal court, thus ensuring no public filings and, more importantly, ensuring that if the SEC declines to bring the case, nobody ever knows about it other than the Government who is required to keep the case and the whistleblower confidential. Built into the Dodd-Frank Whistleblower Provisions, though, are specific protections to prevent the identity of the whistleblower from ever being known to the defendant. First, SEC investigators and attorneys are required by law to maintain the confidentiality of the whistleblowers. And second, the SEC Whistleblower Program allows whistleblowers to remain anonymous, even to the SEC, throughout the investigation. The whistleblower is only required to reveal his or her identity when it comes time to collect an award.
First, SEC investigators and attorneys are required by law to maintain the confidentiality of the whistleblowers. And second, the SEC Whistleblower Program allows whistleblowers to remain anonymous, even to the SEC, throughout the investigation. The whistleblower is only required to reveal his or her identity when it comes time to collect an award. Confidentiality Under The IRS Whistleblower Program Similar to the SEC Whistleblower Program, the IRS will protect the identity of the whistleblower to the fullest extent permitted by law. IRS whistleblower filings are provided to the IRS, and not filed in court, so there is no presumption that the public’s right to know outweighs a whistleblower’s need for anonymity. The IRS investigates a claim and generally negotiates a resolution with the taxpayer which is kept confidential.