9 Things Every Qui Tam Whistleblower Needs To Know

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  1. What is qui tam?
  2. Who are whistleblowers, and what do they do?
  3. What happens in a qui tam case?
  4. Should I file a qui tam suit?
  5. What makes a good qui tam case?
  6. How much do I stand to gain?
  7. What are my rights?
  8. Should I wait?
  9. How do I find the right firm to protect and represent me?

1. WHAT IS QUI TAM?

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.

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.

2. WHO ARE WHISTLEBLOWERS, AND WHAT DO THEY DO?

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 or correct fraud to the government … only to be rebuffed or even terminated. They come from many different industries and positions, including:

HEALTH CARE

  • Executives
  • Account Managers
  • Financial Officers
  • Accounting Personnel
  • Nurses
  • Doctors
  • Laboratory technicians
  • Hospital employees
  • Pharmaceutical employees
  • Any employee in the billing department of a company that receives payments from Medicare or Medicaid

FINANCIAL SERVICES FRAUD

  • Executives
  • Account Managers
  • Financial Officers
  • Accounting Personnel

PROCUREMENT FRAUD/DEFENSE CONTRACTORS

  • Executives
  • Financial Officers
  • Project Managers
  • Accounting Personnel
  • Quality Control employees
  • Contract Administrators

SCIENTIFIC RESEARCH

  • Doctors
  • Scientists
  • Accounting Personnel

GOVERNMENT

  • Government employees
  • Former government employees

COMPETITORS

  • Many times, it is a competitor of the wrongdoer that knows of the fraud and wants to stop it

3. WHAT HAPPENS IN A QUI TAM CASE?

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 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.

  • If the government chooses to intervene, the whistleblower and his/her attorney continue with the case with the assistance of the Department of Justice.
  • If the government chooses not to intervene, the whistleblower and his/her attorney may continue or dismiss the case as they see fit. Most qui tam firms have no trial lawyers so they generally do not pursue a case after the government has declined to join.

4. SHOULD I FILE A QUI TAM SUIT?

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.

5. WHAT MAKES A GOOD QUI TAM CASE?

Generally speaking, there are several things to consider:

  1. What is the harm to the government? How much money is involved?
  2. What evidence do you have to corroborate your claims?
    • Emails?
    • Recorded Phone Conversations?
    • Potential Witnesses?
    • Records or documents about the scheme and the amount of money involved?

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.

6. HOW MUCH DO I STAND TO GAIN?

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 award the plaintiff receives depends on a variety of factors, including:

  • The significance of the information provided to the government
  • The contribution of the person bringing the action
  • Whether the information was previously known to the government
  • Did the whistleblower report the fraud promptly?
  • Upon learning of the fraud, did the whistleblower attempt to stop it, or report it to a supervisor?
  • Did the qui tam filing or investigation cause the defendant to stop the fraudulent practices?
  • Did the complaint expose a nationwide practice?
  • Did the whistleblower have extensive, first hand details of the fraud?
  • Was there a substantial, adverse impact on the whistleblower as a result of filing the complaint?
  • How the whistleblower learned of the fraud?
  • Was the whistleblower involved in the illegal activity?

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.

7. WHAT ARE MY RIGHTS?

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)):

  • Protects relators from employer retaliation/harassment, including workers who are not technically “employees” under the law, such as independent contractors.
  • Prohibits employer retaliation against the relator’s family and friends.
  • Provides relief to relators who are “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against” because of lawful acts done in whistleblowing – such as job reinstatement (with seniority maintained), 2x back pay (with interest), and compensation for special damages (including litigation costs and reasonable attorneys’ fees).

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.

8. SHOULD I WAIT?

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.

9. HOW DO I FIND THE RIGHT FIRM TO PROTECT AND REPRESENT ME?

Before you hire a lawyer…

For whistleblowers, choosing the right qui tam litigation team 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:

  • How successful is the firm at litigating qui tam cases?

Does the law firm have experience in your industry? Do they know the ins and outs of your trade?

  • Will the law firm withdraw if the government chooses not to intervene? The objective is to get the government to join the suit, but it does not always do so. The government declines to intervene in most qui tam cases.
  • Does the law firm have experience in litigating cases if the case goes to court?
  • Will the firm broker or send you out to another legal team initially or when the government declines to participate?
  • How does the firm make their money? Will they bill you hourly or will they do business on a contingency fee basis, taking a fixed percentage of the winnings only if the case has a successful result.

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.

For more information, email quitam@bafirm.com

Notice

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.