Tugboat Captain Awarded $12M in Whistleblower Suit

A California-based tugboat captain was recently awarded approximately 27 percent of a $42.2 million whistleblower settlement for exposing years of fraud and theft by his employer against the state of California. His $12 million share of the settlement was the second largest payout in the state’s history.

What happened

A California man operated a tugboat for several years that carried mined sand over the San Francisco and Suisun bays. His employer was allowed to mine the sand in return for royalties that it paid to the state of California. While he had a general idea of how much sand was mined, he simply navigated the boat. However, while in his employer’s office one day, he happened to see the log books and knew that something just wasn’t right. His employer wasn’t accounting for all of the sand it mined which saved it a lot of money in state royalties.

He contacted the California Lands Commission, the state agency that issues leases and collects royalties from sand mining companies. An investigation began and prosecutors for the state discovered that several millions of dollars were not accounted for and that the tugboat captain’s employer was blatantly committing fraud and theft. Although the company denied any intentional wrongdoing, it agreed to pay the state $42.2 million – and the tugboat captain then got his cut. Twelve million dollars.

Whistleblower laws

There are federal and state whistleblower laws which allow, and encourage, private citizens to bring lawsuits on behalf of the government against companies that have allegedly engaged in fraudulent activities. Often referred to as Qui-tam lawsuits, they are filed under the False Claims Act when the federal government is involved or under a state version of the law – here, the California False Claims Act – when a state government is involved..

The federal or state government can decide to join the lawsuit or let the person who filed it handle it on their own. In either situation, that person may receive up to 25 or 30 percent of whatever is recovered. Since most whistleblower / qui-tam lawsuits involve a great deal of money, the whistleblower’s “cut” can be extensive. Just ask the tugboat captain…

If you are aware of fraudulent activities against the government and are considering filing a whistle-blower lawsuit, contact a qualified attorney who can help by clicking here.

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