The government’s response to the COVID-19 pandemic is unprecedented. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides $2 trillion for the support of individuals and businesses who are facing financial hardships as a result of the coronavirus. The funds are also to be used for testing and the treatment of COVID-19 patients and the research and testing of vaccines. The scale of the government’s response is huge, and it has been implemented quickly, both of which may contribute to potential fraud occurring.
Fraud may occur as a result of the CARES Act in various ways. Businesses can defraud the government by providing inaccurate information on loan applications to qualify for more financial support than they are eligible to receive. Lenders participating in the Paycheck Protection Program (PPP) may approve loans for small businesses that are ineligible for the program in order to collect the processing fees from the government. Those are not the only ways, however. Some of the others include:
The last point on the above list is likely to be a prime candidate for fraud in the coming months as a result of the amount of goods that the government will be purchasing to battle COVID-19. The U.S. Department of Justice (DOJ) has made it a mission to go after companies that do not protect the first-line responders and health care workers. There could potentially be cases in which the government is purchasing PPE that is defective as a result of a rushed manufacturing process. This could very well be an area that is vulnerable to fraud.
While the DOJ is looking closely at potential fraud cases related to COVID-19, and it often initiates investigations itself, or by referral from other governmental agencies, there will be a heavy reliance on whistleblowers to identify violations of the False Claims Act (FCA).
The FCA makes it illegal to make false or fraudulent claims for federal funds. Further, it creates liability for any entity recklessly or knowingly submitting false claims to the government, causing other entities to submit false claims, or knowingly giving false information material to a claim.
Whistleblowers who discover FCA violations are typically people within a company who believe they witnessed wrongdoing. For example, someone who works in the manufacturing of medical masks believes that their company knowingly sold the government defective masks may choose to report this violation through a qui tam suit (brought on behalf of the government). To encourage reporting, the FCA incentivizes these kinds of lawsuits, so the whistleblower may be eligible to receive a financial award for helping to protect and maintain the integrity and transparency of government programs.
While the FCA does provide protection for these brave whistleblowers, there are still times when whistleblowers are retaliated against for reporting wrongdoing. Typically, the first step in reporting fraud should be reporting it to an internal department or individual who can investigate and mitigate the situation. However, we recommend that whistleblowers first contact an experienced whistleblower attorney to help determine if that step is feasible in their particular situations.
If you work for a company or have knowledge of one that is defrauding the government via the CARES Act and you want to do the right thing, contact the offices of Ross Feller Casey. We have leading attorneys who have experience with these types of whistleblower cases. We will fight to protect your rights and help you determine your next step.
With the speed at which things are happening with the CARES Act, you must not delay if you suspect wrongdoing. Get your free case review today at Ross Feller Casey. There will be no upfront cost, as we handle all whistleblower cases on a contingency basis.
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