1. What is the False Claims Act and what is a qui tam case?
If you have knowledge of frauds or false claims that were or are being committed against the federal government, you may be able to blow the whistle through a lawsuit brought under the False Claims Act (31 U.S.C. Sections 3729 through 3733). This law is designed to punish entities that defraud the government while encouraging and rewarding people who disclose and help prosecute the fraud.
False Claims Act cases are sometimes called “qui tam” lawsuits. Qui tam is an abbreviated Latin phrase that means “he who sues on behalf of the King as well as for himself.” When a whistleblower brings a qui tam case under the False Claims Act, he or she is referred to as a “relator.”
2. What are the benefits of speaking out against fraud under the False Claims Act?
Fraud against the government is fraud against the taxpayer, and it siphons funds from government goods and services and puts money into the pockets of corporations. Moreover, fraud can be deadly: when a company sells a mislabeled drug, ineffective weapons system or flawed satellite to the government, more than just dollars are at stake.
That’s why the government encourages and protects whistleblowers – because their information may cut waste, protect soldiers and save lives.
Under the statute, successful whistleblowers may recover a percentage of the money the government recovers, as well as attorneys’ fees.
A successful qui tam plaintiff (but not someone who merely informs the government of wrongdoing) can receive between 15 and 30% of the total recovery from the defendant, whether through a favorable judgment or settlement, which can include the amount owed to the government, times three, plus penalties.
3. Does the False Claims Act protect me as a whistleblower?
The False Claims Act protects whistleblowers from retaliation for their whistleblowing activity by their employer, including job loss, demotion, harassment and other forms of retaliation. If you have been discriminated against because of whistleblower activity, you may be able to receive reinstatement, double back pay and compensation for any special damages, including litigation costs and reasonable attorneys’ fees.
There are time limits for filing a retaliation case, so please speak with an attorney as soon as possible if you believe you are a victim of retaliation under the statute.
4. What types of fraud are covered under the False Claims Act?
1. Overpayment. The Act defines knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment – such as submitting an inflated healthcare cost, prescription drug or military equipment invoice to the government – as fraud.
2. Failure to provide products or services. The Act also prohibits the knowing failure to provide a good or service. Similarly, knowingly providing goods or services that are substandard may be considered a fraud or false claim.
3. False statements or false certifications. The Act prohibits knowingly using or causing to be used a false record or statement to get a claim paid by the federal government. False certifications also trigger liability under the law particularly where the government contractor is falsely certifying compliance with safety, environmental, non-discrimination, or procurement standards or laws.
4. Conspiracy. The Act prohibits conspiring with others to get a false or fraudulent claim paid by the federal government.
5. Tax fraud. Though not technically part of the False Claims Act, qui tam laws were recently extended to include tax fraud cases. That is, if you have evidence that a person or entity defrauded the government by under-paying their taxes, you can file a claim that the government will investigate. If taxes are recovered, you can receive up to 30 percent of the recovery. These cases are sometimes called tax whistleblower or IRS whistleblower cases.
In recent years, cases of fraud in the pharmaceutical and healthcare industries have increased, though fraud against the government may exist in any industry.
5. Who can file a False Claims Act claim?
Generally any person or entity with evidence of fraud against federal programs or contracts may file a quitam lawsuit.
6. Are there time limits for filing a qui tam lawsuit?
Under the False Claims Act, a lawsuit must be brought generally six years after a violation or three years after you or the government knew or should have known about the violation. In some jurisdictions, the time limit may stretch to ten years. The rules governing time limits are complicated and could prevent your case from moving forward, so speak with an attorney as soon as possible.
7. How do I file a claim?
If you believe you have evidence of fraud against the government, you should consult with an experienced attorney. These cases differ from normal court cases. They must be confidentially filed under seal in federal district court so that the government can conduct an investigation. Generally, when the investigation is over, the seal on the case is lifted.
Unlike in normal cases, a copy of the complaint is not immediately served on the defendant. Instead, it must be served, or presented, along with a written disclosure of substantially all material evidence and information in the plaintiff’s possession, on the U.S. Attorney General and the U.S. Attorney for the district in which the complaint is brought.
If the relator violates the provisions of the court’s seal, his or her complaint could be dismissed. The government has the right to intervene and join the action, which means the government may become a party to the case alongside the whistleblower relator. If the government declines, the relator may proceed on his or her own. Some states have passed similar laws concerning fraud in state government contracts.
For a typical case overview and steps to follow, click here.
8. Are there protections for whistleblowers who reveal instances of fraud against state governments?
Due to the success of the Federal False Claims Act, a growing number of states have enacted versions of the False Claims Act. These laws permit whistleblowers to recover a “finder’s fee” for reporting fraud in state, local, and municipal contracting.
9. Who should I call if I believe I have evidence of fraud against the government?
Mehri & Skalet, PLLC, handles qui tam and False Claims Act litigation including defense industry procurement fraud, healthcare fraud, and more.