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Blow the Whistle, Get Paid

Whistleblower Lawsuits Offer a Powerful Tool to Fight Corruption in the COVID-19 Pandemic and Beyond

Written by Andrew S. Willis, Esq.

In 2013, a Licensed Practical Nurse in a South Carolina hospital began to suspect that a new diagnostic test to be run on patients was not medically required. After further review, he discovered that the new test was a part of training of a medical supplies company called CareCorp National LLC. The company made millions of dollars off of taxpayers due to billing Medicaid and Medicare for these unnecessary procedures.

The nurse decided to file a lawsuit, and the federal government intervened, eventually settling the suit to recover $54 million dollars from the company. Because the he blew the whistle on the scheme, the nurse was awarded $10.5 million plus interest, equaling 20% of the total recovery.

Not all whistleblower lawsuits yield such dramatic results, but defrauding the government is surprisingly common. In 2019 alone, the Federal Department of Justice recovered over $3 billion of government money from people who made false claims to the federal government under the Federal False Claims Act.

The False Claims Act has become especially relevant in the COVID-19 pandemic. Through the CARES Act, the Federal government is spending $2.7 trillion to prop up the economy. Congress has authorized over $600 billion for taxpayer-backed forgivable loans to small businesses under the Paycheck Protection Program. With so much money being handed out so quickly, the potential for fraud is high. The government is very aware of this. U.S. Attorney General William Barr has urged the public to report suspected fraud schemes related to COVID-19.

The State of Illinois also has a False Claims Act with terms nearly identical to the Federal law, allowing prosecutors to sue and recover the money from those who defrauded the government. A defining feature of both Federal and Illinois law is that they encourage private citizens to report and pursue recovery of numerous defalcations such as instances of fraud, and even allow individuals to sue on the government’s behalf. As an incentive, a person who blows the whistle on the fraud will get a percentage of the government’s recovery if the claim is successful. Depending on the extent of fraud, the compensation for blowing the whistle can be substantial.

In 2012, Governor Pat Quinn signed an amendment to the Illinois False Claims Act to extend to false claims against local municipalities in addition to claims against the state government. This allows private individuals to police for false claims made to local governments and if the claim is successfully pursued, be compensated. For example, owners of a competing store were able to pursue a claim against Home Depot claiming the hardware store did not pay the required retailer’s tax. People ex rel. Lindblom v. Sears Brands, LLC, 2019 IL App (1st) 180588.

These laws are an important tool in fighting corruption and rewarding citizens who assist the government in recovering misappropriated public funds. Here is an overview of the terms of the Illinois False Claims Act and how whistleblowers can be compensated:

What is a false claim?

A person is liable under the Illinois False Claims Act by knowingly making a false or fraudulent claim to a state or local government. Actions that would be considered violations include:

  • Charging the government for more than was provided;

  • Fraudulently seeking a government contract;

  • Submitting an application for a government loan with false information;

  • Demanding payment for goods or services that do not meet the requirements of a regulation or contract;

  • Requesting payment for goods or services that are defective or of lesser quality than were contracted for;

  • Attempting to pay the government less than is owed.

Notably, the Act excludes claims made under the Illinois Income Tax Act, so no claims can be made for personal income tax evasion.

But a false claim can mean reporting an administrator misappropriating school district funds, a construction contractor over-billing on a government contract, a public worker overcharging a public pension fund, or a doctor billing Medicaid for unnecessary procedures. A false claim can even be made by a municipality defrauding another municipality. For example, a retired police officer was able to pursue a claim against the Village of Indian Head Park for over-billing Lyons Township for policing services and failed to remit traffic fines. See Lyons Twp. ex rel. Kielczynski v. Vill. of Indian Head Park, 2017 IL App (1st) 161574.

Of particular relevance to the COVID-19 pandemic, over 500,000 businesses have applied for forgivable loans under the Paycheck Protection Program (PPP) to help businesses keep employees on payroll. If someone has information of a small business applying for the relief with false information, a false claim can be pursued under the Federal law.

What is the liability for those who make a false claim?

Persons making a false claim are liable to the government for three times the amount of money defrauded from the government, plus a civil penalty ranging from ten to over twenty thousand dollars.

Who can bring a false claim action?

Even if you are not directly affected by the false claim, a private individual (also known as a relator) may pursue the claim through a qui tam action (i.e. bringing an action on the government’s behalf). Before a qui tam action can be pursued, a copy of the complaint and all material evidence and information the person possesses must be disclosed to the State. The State will review the information and may elect to intervene and proceed with the action within 60 days. If the State decides not to proceed, the individual can pursue the action in his or her own capacity.

How much can a whistleblower be compensated?

If the State decides to intervene in a case, the whistleblower may receive 15-25% of the recovery. If the State does not intervene and the whistleblower pursues the case on their own, they may receive 25-30% of any eventual recovery, along with reasonable attorneys’ fees.

How long do you have to pursue a false claim?

The deadline (also known as the statute of limitations) to bring an action is six years after the false claim occurred. In circumstances where a potential reporter had no reason to know about the false claim, under the Discovery Rule, the deadline can be extended to three years after discovery of the violation. However, in no event, can an action be brought more than ten years after the violation occurred.

Can a claim be brought for fraud that is already known to the public?

One cannot bring a claim for fraud that is already known to the public or when the relator is not an original source of the information. For example, if the fraud has been reported in the newspaper, a person cannot use this information to pursue a claim. This is because the government does not want to award people who only learned of the fraud through public channels and did not contribute to exposing it.

The law requires that one be an original source of the false claim information. However, there is nothing preventing one from discovering information from a friend or family member who is in a position to know of a potential false claim. A private arraignment can even be made between the whistleblowers to split any possible award.

Would my job be at risk if I report my employer?

Employers are prohibited from retaliating against whistleblower employees. Retaliation includes firing, demoting, suspending, threatening, or harassing the employee. If the employer does retaliate, the employee is entitled to the reinstatement of their position, two times the amount of back pay, interest on the back pay, and compensation for any damages sustained because of the retaliation.


While this information should not be construed as legal advice, the attorneys at Mauck & Baker, LLC are available to advise and represent you if you are aware of a company, municipality, or person who intentionally defrauded the government. You can speak to an attorney at 312-726-1243 or info@mauckbaker.com,


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