No Need to Write a Book: A Whistleblower’s Guide to Protecting Yourself
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At the 35th Annual ACFE Global Fraud Conference, Clark Bolton, J.D., CFE, an attorney with Morgan and Morgan, presented "No Need to Write a Book: A Whistleblower’s Guide to Protecting Yourself" to attendees. This session provided critical insights and practical advice for Certified Fraud Examiners (CFEs) on navigating the complex and often perilous journey of whistleblowing. Drawing from his own experiences as a successful health care whistleblower, Bolton offered attendees a comprehensive guide on how to protect themselves when faced with employer fraud.
Understanding Whistleblowing
Bolton began the session by defining whistleblowing and explaining its various forms. He highlighted that whistleblowing involves reporting illegal, illicit or fraudulent activities within an organization, either internally or externally. This can range from minor infractions by low-level employees to large-scale corporate frauds involving billions of dollars. Bolton emphasized the importance of understanding the scope and implications of whistleblowing before taking any action.
Sharing his own story, Bolton recounted his experience as a whistleblower in the health care industry. He worked as a criminal and civil investigator and served as the supervisor of investigations in the Special Investigations Unit for one of the nation's largest health maintenance organizations. Bolton blew the whistle on fraud within the organization and faced severe retaliation, including ostracization and termination. He subsequently filed a qui tam lawsuit in 2007, which settled in 2012 for $137 million.
Successful Whistleblowing Is Difficult
Bolton stressed that successful whistleblowing is inherently challenging. According to Morgan and Morgan's data, in 2023, the firm received over 1,500 whistleblower intakes but filed only 12 cases, approximately 0.8% of the intakes. Bolton stated that the government intervenes in only about 20% of False Claims Act cases, with approximately 90% of those cases settling successfully.
Bolton provided several best practices for potential whistleblowers:
Consult an attorney: Immediately consult with an experienced whistleblower attorney before taking any action. This helps in understanding the legal landscape and options.
Assess your environment: Evaluate the work environment to predict likely outcomes of whistleblowing.
Maintain confidentiality: Do not disclose to anyone that you have consulted with an attorney and avoid trusting colleagues with sensitive information.
Collect evidence: Gather relevant evidence discreetly and securely maintain copies along with a detailed narrative of the allegations.
Stay calm and focused: Continue to excel in your job while managing the whistleblowing process.
Bolton also discussed various options for whistleblowers, including:
Not blowing the whistle: Considering the consequences and deciding against whistleblowing.
Anonymous reporting: Reporting fraud anonymously to internal or external bodies.
Federal programs: Utilizing federal and state government reward-based programs, such as the Federal False Claims Act (FCA), Securities and Exchange Commission (SEC) and others.
Retaliation and Legal Protections
Bolton addressed the reality of retaliation and the legal protections available to whistleblowers. Under the FCA, whistleblowers are entitled to relief if they face retaliatory actions such as discharge, demotion or harassment. This includes reinstatement, double back pay and compensation for special damages. Similarly, the Dodd-Frank Act provides protections, including reinstatement and double back pay.
Bolton explained the impact of non-disclosure agreements (NDAs) and public policy exceptions. He noted that NDAs cannot prevent whistleblowers from reporting violations to government agencies or from participating in government-administered whistleblower programs. He also stressed the need to understand the legal nuances and protections related to trade secrets and other sensitive information.
Bolton concluded the session by emphasizing the importance of seeking experienced legal counsel before blowing the whistle and carefully considering all options. He reminded attendees to protect their evidence, maintain confidentiality and stay focused on their professional responsibilities.
