Rewarding Integrity, Recovering Funds
The federal government loses an estimated
$233 billion–$521 billion annually to fraud.
States are the first line of defense against this grotesque waste. While it is important for states to create mechanisms that prevent fraudulent payments from happening in the first place, it is equally critical to incentivize the public to help find and recover unlawfully obtained dollars.
Many states reward people who provide information leading to the recovery of stolen government funds. However, many of these programs are inefficient and slow. Evidence grows stale, whistleblowers risk retaliation, and the stolen funds disappear. Other states have no such program.
THE SOLUTION
To track down wasted tax dollars, citizens should be rewarded for reporting criminal activity, through a process called qui tam.
Twenty-one states do not have a qui tam law. Others limit awards to specific government programs. To address fraud in all programs, including Medicare, childcare, and state contracting, the law must be all-encompassing and efficiently administered.
One important step is to ensure the state’s attorney general (or other designated official) quickly reviews each case to determine whether the state will assist the investigation and court proceedings. If the state declines, private parties must be free to continue pursuing the case and receive a larger bounty if they win. Either way, citizens must see their day in court as soon as possible.
This model functions through various mechanisms
WHY IT MATTERS
Stolen taxpayer dollars will be recovered faster, fraudulent payments will be stopped before they are made, and private parties will pursue enforcement mechanisms that the State cannot manage on its own.
Recovered funds can be returned to their originally intended programs and support additional investigations. Additionally, a network of incentivized watchdogs will deter bad actors from committing fraud in the first place.
THE BOTTOM LINE:
Fraudsters count on slow investigations and overstretched state investigators. Every state program, from Medicaid to childcare to state contracts, would benefit from more visibility into how funds are spent, which in turn would help deter bad actors and ensure stolen dollars are recovered. The taxpayer bounty model creates a network of watchdogs, supported by advanced technological tools, to uncover fraud and protect taxpayer dollars.
Sources:
https://www.gao.gov/blog/nine-ways-congress-can-combat-fraud-federal-government
https://www.gibsondunn.com/false-claims-act-2026-mid-year-update/
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