You may have heard the recent buzz about “whistleblowers” earning monetary rewards for exposing fraud. Here in Chicago, the City has passed a law encouraging people of conscience to step forward and expose financial abuses – all while receiving a percentage of the recovery for themselves as a reward.

At Loevy & Loevy, we have made it a priority to seize the opportunity provided by whistleblower laws to expose bid-rigging and other frauds that can occur during privatization deals.

No matter what your personal philosophy about the pros and cons of privatization, everyone agrees that the deals should be kept clean. Those who abuse the privatization process to shortchange the taxpayers must be held responsible. The full value that the City should have recognized on these deals could be going to pay for schools and police services and pensions. Instead, the City is in the hole to the tune of over $500 million this year alone.

If you work at one of the firms that were involved in these privatization deals, you are in a position to help the City’s taxpayers, as well as earn valuable financial compensation for your efforts. Here is how it works:

1. The Damages

Under the law, the first person to file a qui tam whistleblower lawsuit about a particular fraud is entitled to receive 15% to 30% of the government’s recovery.

For example, the winning bid submitted for the City’s parking meter lease was $1.15 billion, but the deal has been valued as high as $5 billion. If a company used sharp practices to secure the contract (e.g., lied during the bidding process, coordinated its bid with other bidders, or had a conflict of interest), the City was damaged in the amount by which the bid was undervalued, a sum up to $3.85 billion. As stated, whichever whistleblower is first to expose such fraud is entitled to a substantial portion of all monies the City is able to recover.

2. Treble Recovery and Penalties

Whistleblower laws ensure that the City is fully compensated by requiring the defendant to pay “treble” damages – meaning that the damages are multiplied by three. In the above example, the company that manipulated the bidding process would be on the hook for $11.55 billion (three times $3.85 billion).

In addition, the whistleblower laws punish the defendant by requiring a penalty of between $5,500 to $11,000 for each false claim. The whistleblower’s share includes these penalties.

3. The whistleblower’s reward

Under the law, the whistleblower who files the first suit will receive compensation of 15% to 30% of funds recovered by the government. Factors such as the degree of the whistleblower’s contribution to the case, the stage of the case when the recovery occurs, and whether or not the government prosecutes the case, all determine where in this range the whistleblower will fall. The final percentage is usually negotiated between the whistleblower’s counsel and the government.

In the parking meter example, if the government recovered $11.55 billion then the minimum that the whistleblower would be entitled to receive is $1.73 billion.

As a practical matter, the government often settles with the defendant for only double damages in order to avoid the risks and delays of a trial. In that event, the whistleblower’s share in the foregoing example would be $1.16 billion.

4. The first to file requirement

Under the law, only the first person to file suit about the fraud will be entitled to the bounty. The law requires that a court dismiss all other cases about the fraud other than the first-filed case.

Accordingly, time is of the essence, and it is vital that both the whistleblower and the whistleblower’s attorney act as fast as possible.

We at Loevy & Loevy understand this issue better than most firms. Moving fast is part of our ethic. In fact, there have been circumstances where we have literally filed the same day in order to ensure that the whistleblower would not lose his right to the bounty. This is why we have prepared to file privatizations cases by studying these deals in advance.

For these reasons, we are confident that Loevy & Loevy is your best bet to obtain a reward bounty if you chose to expose privatization fraud.

5. The sealed case requirement

The law requires special procedures for whistleblower cases. One of these is that the case must be filed with the court under seal. As a result, only the whistleblower’s team, the court, and the government’s investigators learn about the suit. The case does not become unsealed for months or longer, until the City has completed its investigation and is ready to settle or to let the whistleblower and his/her attorneys to prosecute the case.

What you should do now

As you can imagine, with huge potential rewards at stake, there is a serious risk that more than one would-be whistleblower will want to file a suit, so it is important that you act as fast as you can.

You can speak to us without any obligation, even anonymously if you wish, by phone, email, or in person. Our attorneys will answer any questions you may have in a totally confidential environment. We take very seriously the privacy and confidentiality of all inquiries.

If you decide to proceed with a claim, and if we decide to represent you, you will have no obligation to pay any retainer monies for legal counsel. We get paid as a proportion of any reward our clients are able to obtain, and we only earn a fee if you win, thereby maximizing the incentives for success.

The law also confers strong protections for whistleblowers, the goal being to ensure that no one should experience any adverse effects at work for blowing the whistle on corruption and fraud. We make a strong commitment to our clients to protect and enforce all of their rights in that regard.

We encourage you to call our attorneys at (312) 243-5900 and get answers to any questions you may have.