The federal False Claims Act (FCA) allows whistleblowers who have information about fraud against the federal government to file lawsuits (often referred to as “qui tam” actions) against the company or individuals suspected of perpetrating the fraud. The whistleblower is frequently an employee of the company committing the fraud, but can also have obtained the information in some other manner. The vast majority of qui tam lawsuits involve the healthcare industry – including healthcare providers, pharmaceutical companies and medical testing and diagnostic labs – and seek damages for medicare or medicaid fraud and abuse. However, qui tam lawsuits are also brought to combat fraud in other areas of government procurement, including cases brought against defense contractors.
We have extensive experience representing FCA qui tam Relator/Whistleblowers, frequently undertaking such representations in a strategic co-counsel partnership with a former federal prosecutor who previously served as the Chief of Health Care Fraud Prosecutions at the Eastern District U.S. Attorney’s Office. As a result, we are able to provide our clients with a team that has decades of high-level experience with both employee whistleblower representation and government fraud prosecutions.
Defendants found liable under the False Claims Act may have to pay as much as three times the government’s losses plus penalties for each false claim. The whistleblower is entitled to receive between 15 and 30 percent of amounts recovered by the United States government from defendants charged with violations of the Act. The FCA also provides employee-whistleblowers with protection against retaliatory employment actions, including termination, together with the right to enforce these protections by bringing a claim for the damages suffered by the whistleblower as a result of the employer’s retaliation.
The FCA prohibits the making of claims for payment from federal funds where the claims are knowingly false within the meaning of the statute, including situations where the defendant knowingly concealed (or decreased) an obligation to pay or transmit money or property to the government. There are similar FCA statutes in more than two dozen states, including New York, Connecticut and New Jersey. These laws allow whistleblowers to bring qui tam lawsuits to recover money from those who have defrauded the state government.
To qualify under the federal FCA, the claim of the whistleblower (often referred to as the “relator”) cannot be based on the facts of another already pending FCA action. Also, the claim cannot be based on “publicly disclosed” allegations as defined in the statute, unless the whistleblower is an “original source” of the information within the meaning of the law. Awards can be reduced if the whistleblower initiated or planned the conduct giving rise to the claim.
After the qui tam lawsuit is filed, the government can decide to intervene and essentially take over the qui tam action. If the government declines intervention, the whistleblower and her attorney continues to prosecute the case on behalf of the federal government.
In January 2020 the United States Department of Justice reported that it had obtained more than $3 billion in settlements and judgments from civil cases FCA cases involving fraud and false claims against the government during the fiscal year ending Sept. 30, 2019. Recoveries since 1986, when Congress substantially strengthened the civil FCA, now total more than $62 billion.
A whistleblower should act quickly after she obtains evidence of fraud because the law generally rewards the first relator to file a qui tam action.