Signed into law by President Abraham Lincoln in 1863, the False Claims Act (also known as “Lincoln’s Law”) was created to fight widespread fraud against the Union troops and the federal government.
Today, it enables private individuals, who have unique, insider knowledge of fraud committed against the federal government, to bring suit on its behalf and receive a portion of its award. They blow the whistle, “relating” information to the government. The False Claims Act or FCA has been integral in recovering monies for the U.S. taxpayer and the United States Federal government from unscrupulous individuals and entities since it was signed into law.
These suits, brought for “the government as well as the plaintiff,” are known as qui tam cases … and by punishing and deterring fraud, they protect the lives of medical patients, soldiers, American citizens generally, and many others.
Under the False Claims Act, whistleblowers can be rewarded when they report non-public information about fraud against the government.
Did you know? The phrase “qui tam” is Latin, meaning “who as well.” And in the 13th Century, it referred to English lawsuits where a person sued on behalf of the King … as well as for himself.
Qui tam whistleblowers, also called “relators,” are people who have inside information about fraud being committed against the government and sue on the government’s behalf.
Whistleblowers are often current or former employees who have attempted to report fraud or correct fraud to the government … only to be rebuffed or even terminated. The different types of fraud cases include:
Though every qui tam case is different, typically, there are a few steps to the process:
Step A: A private citizen, with non-public information about a business or an individual defrauding the government, contacts a qui tam law firm.
Step B: After gathering the evidence and evaluating the merits of the case and financial stability of the defendant, the whistleblower’s attorney decides whether to enter in contractual relationship with the whistleblower, which is generally done on a contingency fee basis. This includes the qui tam portion as well as any retaliation cause of action.
Step C: If the attorney and whistleblower agree to contractual terms, the attorney will spend a significant amount of time to prepare a disclosure statement for the government and complaint to file with the court.
Step D: The Department of Justice places the lawsuit “under seal” for 60 days (or more, upon the government’s request) to carefully examine the fraudulent claims.
Step E: During the seal period, the government is encouraged to subpoena records from the defendant company to further substantiate the claims.
Step F: During the seal period the case is not public information, and the accused is not notified. Occasionally, however, the government may request the court to partially lift the seal to discuss the allegations with the defendant and negotiate a potential settlement.
Step G: Typically with the help of the relator’s attorney, the government decides to intervene or not intervene in the case.
Step H: What happens next depends on the government’s decision to intervene.
The central question to answer is: do you have non-public or “inside” info that an individual or entity has committed fraud that is damaging to the federal government?
Contrary to what you might have heard, you do not have to have been harmed personally to file a qui tam case. If you have been harmed personally, the law allows you to pursue a retaliation claim against the defendant.
Generally speaking, there are several things to consider:
Of course, there’s no reason to worry if you do not know how to organize this information at the moment. A good qui tam law firm will help you put the information together in a timely manner, and present it in the most persuasive way possible.
If your qui tam case is successful, the False Claims Act provides for, with some exceptions, a recovery range, 15-25 percent if the government intervenes, and if the government chooses not to intervene, 25-30 percent.
The whistleblower reward the plaintiff receives depends on a variety of factors, including:
The plaintiff’s award is generally resolved by negotiation between the Department of Justice and the qui tam plaintiff’s lawyers. The court will become involved if there is no agreement.
Since the False Claims Act was amended in 1986, there have been more than $30 billion in recoveries.
A whistleblower’s identity is typically disclosed to the government as part of his/her disclosure statement. While the case is under seal, the defendant will not know of the whistleblower’s identity. Some whistleblowers may proceed anonymously but it is not a favored practice in the courts.
The False Claims Act (31 U.S.C. § 3730(h)):
The Federal Claims Act has been updated and most of these amendments were attempts to provide the whistleblower the most protection possible. Most recently, in 2009, the FCA was amended to clarify that the FCA to expand the provision to include “any employees, contractor of agent” who are discriminated against because of lawful acts done “in furtherance of other efforts to stop 1 or more violations” of the FCA. The amendment removed the requirement that the retaliatory action be taken by the whistleblower’s employee and to protect not only the employee by family members and colleagues of the whistleblower and independent contractors and agents of the employer.
The False Claims Act states that once a person has filed a qui tam lawsuit, no other person may file “a related action based on the facts underlying the pending action” (31 U.S.C. §3730(b)(5)).
It’s important to consider if there is anyone else – another employee or coworker – that knows what you know about the government’s fraud. Have you talked to anyone else about the information you possess?
Put simply, if you have a good case, proceed expeditiously. There’s little time to waste. If someone “beats” you to filing a case, you will lose your standing.
Before you hire a whistleblower lawyer…
Choosing the right qui tam lawyers may be the toughest part of the process. So much depends on getting the best firm. And while there are many, many things to consider when selecting a firm to protect and represent you, there are few questions every whistleblower needs to ask:
Does the law firm have experience in your industry? Do they know the ins and outs of your trade?
The objective is to hire the right law firm from the beginning. The firm should have qui tam experience and the expertise in trying lawsuits. Look for the best TRIAL ATTORNEYS with qui tam experience. That way, if the government declines to participate you do not have to search for another firm, or if the government intervenes, the firm has the trial experience to assist the government in court.
The qui tam attorneys at the Law Offices of David Berg have extensive involvement in prosecuting qui tam litigation cases on behalf of the government. The firm represents whistleblowers nationwide in many large Medicaid fraud, Medicare health care fraud cases, defense contractor cases, and contractor fraud cases, as well as other types of cases involving fraud against the government.
Many whistleblowers, with inside information on illegal activities, may have civil and potentially criminal exposure and decisions will need to be made about the risks of pursuing a qui tam case, weighted against whistleblower protection that is afforded through the Federal False Claims act amendments.
The Law Offices of David Berg has a nationwide practice representing qui tam/whistleblower clients in lawsuits throughout the country. The firm maintains its principal offices in Houston, Texas and New York, New York with offices in Washington, D.C., Denver, Colorado and Miami, Florida.
This website is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this website also does not result in the formation of a lawyer-client relationship.
You should be aware that qui tam claims are subject to a Statute of Limitations. The area of limitations periods is complex. There are also first-to-file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.