Hello Maari-ga, and thanks for asking a particularly fascinating
Much of my professional work (when I'm not at the keyboard doing
Google Answers) centers around involving citizens in the affairs of
One of the tools that Congress choose to empower citizens under
certain circumstances is the one you are referring to -- if John Q.
Citizen uncovers a case of fraud against the federal government, then
Mr. Citizen is entitled to some of the $$$ recovered.
Generally, this goes by the name "Whistleblower Protection". Legally,
it's known by the almost quaint phrase, Qui Tam:
(Black's Law Dictionary pronunciation: kwày tæm)
Frequently known as the "Whistle Blower Act." Qui tam is a provision
of the Federal Civil False Claims Act that allows private citizens to
file a lawsuit in the name of the U.S. Government charging fraud by
government contractors who improperly receive or misuse government
funds. If the recovery is successful, the whistle blower (also known
as the "relator") may share in any money received.
The qui tam provision has had the effect of privatizing government
legal remedies by allowing private citizens to act as "private
attorneys general" in the effort to prosecute government procurement
and program fraud.
Qui Tam has spawned a whole subspeciality in the legal profession, as
you can see from doing a simple Google search on "Qui Tam". There are
plenty of sites like this one:
QuiTamOnline.com is a network of attorneys who have recovered over
$150 million in taxpayers' money falsely billed to the United States
by government contractors. This website explains the "Qui Tam"
provisions of the federal False Claims Act. If you have been
contemplating blowing the whistle on fraud against the federal
government, this site will help you assemble the information you need
to bring your case to a lawyer for evaluation and possible filing. It
will also help you decide whether filing a suit is the right thing for
you to door whether some other approach to the problem might be
The site also gives some background on the underlying laws:
"The False Claims Act...allows a private individual or
"whistleblower", with knowledge of past or present fraud on the
federal government, to sue on behalf of the government...The person
bringing the suit is formally known as the "Relator."
...The False Claims Act, also called the "Lincoln Act," "Informer's
Act," or the "Qui Tam statute," was enacted during the Civil War. Qui
Tam is shorthand for the Latin phrase "qui tam pro domino rege quam
pro seipse", meaning "he who sues for the king as for himself."
...More than 4,000 Qui Tam suits have been filed since 1986, when the
statute was strengthened to make it easier and more rewarding for
private citizens to sue. The government has recovered over $6 billion
as a result of the suits, of which over $960 million has been paid to
So to answer your question directly, the whistleblower law doesn't
apply to any type of fraud -- only frauds against the federal
I hope this is the information you were looking for. If anything
needs explanation or clarification, just post a Request for
Clarification and I'll be glad to assist you further.
search strategy: Google search on: Qui Tam