How Much Is My False Claims Act Case Worth? What Sort of Whistleblower Awards Can I Expect?

Are you considering blowing the whistle under the False Claims Act (FCA)? One of the first questions that likely comes to mind is, What’s the upside? This article provides a practical overview of factors that may influence the value of your case and whether pursuing it is worth the effort.

Before diving in, it’s essential to note that this is general information and not legal advice. FCA cases are complex, and their outcomes depend on many moving parts. Always consult with a qualified whistleblower law firm to fully understand your rights and evaluate whether to proceed.

The Promise of False Claims Act Awards

Yes, headlines about whistleblowers earning hundreds of millions of dollars in awards are enticing. However, these outcomes are the exception, not the rule. In reality, most FCA cases don’t result in payouts, let alone life-changing awards. To maximize your chances of success, you need a solid strategy, the right whistleblower legal team, and an understanding of what it takes to prevail.

How False Claims Act Awards Are Calculated

If your FCA case succeeds, you could receive up to 30% of the government’s recovery. Let’s break down the math with some scenarios.

Example: Medicare Fraud Case – $5 Million

If you report $5 million in fraud, the government may seek double or triple damages. Assuming a settlement for double damages, the recovery is $10 million.

If the government intervenes in your case, your relator’s share will typically range from 15-25%, often settling around 18%. That translates to an $1.8 million whistleblower award.

From this, deduct attorney fees (often 40%) and taxes, which reduce your take-home amount.

For example, in a recent case, Paragon Systems agreed to pay $52 million to resolve False Claims Act allegations — demonstrating how high these recoveries can climb when fraud involves federal contracts or security services.

Example: Non-Intervened Case – $5 Million

If the government declines to intervene and you proceed with the case successfully, you could recover 30% as the relator. For a $15 million recovery (triple damages), that’s a $4.5 million whistleblower award.

For larger cases, such as $50 million in fraud, your share of the whistleblower rewards could soar. But remember, most cases fall short of these outcomes due to various hurdles.

Factors That Can Impact Your FCA Case Value

Even strong FCA cases face challenges. Here are some key factors that may reduce or negate your award:

Choosing the Best Whistleblower Law Firm

Filing a False Claims Act case without experienced representation is a critical error. The law requires you to file under seal with the help of a qualified attorney. Choosing a whistleblower law firm like Brown, LLC can significantly enhance your odds. Firms with a track record of success and Department of Justice (DOJ) alumni on staff, such as Brown, LLC, can effectively interface with government agencies and ensure your case is filed correctly. Under the law, you cannot file a False Claims Act case without an attorney. Since you must hire one anyway, it’s in your best interest to secure the most experienced and accomplished whistleblower law firm possible.

Delays in Filing – Delay, Delay, Delay Could Mean No Pay

Under the FCA’s first-to-file rule, delay can cost you everything. If someone else files a similar claim first, your case may be dismissed, leaving you with nothing. Acting promptly after identifying fraud is critical and there’s a sanctity in being the first to file. Even if you’re not first, sometimes there’s agreements made between the whistleblower law firms to have you receive some whistleblower award. The chance of an agreement in enhanced when you are going with one of the more prolific filers like Brown, LLC since they often encounter the other big filers and try to work out sharing agreements although nothing is ever guaranteed.

Collectability of Awards – Who’s Paying Who?

Winning a case doesn’t guarantee payment. In an unfortunately ironic bootstrapping situation, If the defendant’s financials are tied to the fraudulent activity, they may lack the resources to pay a settlement or judgment and the case may resolve along an ability to pay analysis. Criminal actions, like PPP loan fraud or Medicare kickback schemes, sometimes involve defendants fleeing with the funds, leaving little to recover.

Criminal Dimensions

If your FCA case involves criminal conduct, it may trigger investigations that slow the process or complicate recovery. For instance, seized assets may require alternative remedies under the FCA to secure a share of the recovery.

Proving Your Case – The Proof is in the (Fake) Pudding

Even with evidence of fraud, proving it to the government’s satisfaction can be challenging. Complex cases, such as those involving Medicare records or medical necessity, require significant resources to litigate. In contrast, straightforward schemes, such as services not rendered or cross-charging in defense contracts, are often easier to prove.

Jurisdiction Matters – Read the Statute, Read the Statute, Read the Statute & The Caselaw

Where you file your FCA case can significantly affect its outcome. Some states, like California and Illinois, allow whistleblowers to recover for private insurance fraud, offering awards up to 50%. Others, like Ohio, limit recoveries to federal damages, excluding state funds, so you will be shorted for an Ohio Medicaid recovery. States like New Jersey, supported by favorable federal case law, have statutes that are more conducive to pursuing customs fraud cases compared to states like California. Understanding the nuances of federal and state FCA laws is essential.

FY2024 False Claims Act Settlements and Values

In FY2024, the aggregate value of False Claims Act settlements and judgments exceeded almost $2.9 billion dollars. Nearly 60% was due to Medicare Fraud, Medicaid Fraud and Tricare fraud – which were fraudulent claims submitted in the healthcare industry to the federal government as a payor. Some examples of Medicare fraud settlements included fraud with managed care providers, pharmaceutical prescriptions that were never filled but billed, and kickbacks related to prescriptions of opioids.

Another significant area of fraud under the False Claims Act was procurement fraud.

An emerging category in FY24 was cyber-fraud enforcement. Cyber-fraud refers to failure to comply with the security the government expects and was prioritized under the Civil Cyber-Fraud initiative announced in October 2021. The initiative allows for the False Claims Act to be used to keep contractors accountable for violating the federal government’s cybersecurity requirements. For example, Raytheon recently agreed to pay $8.4 million  to resolve allegations of FCA violations for failing to implement cybersecurity controls for an internal development system used to perform work on Department of Defense Contracts.

Speaking of Raytheon one of the largest settlements of 2024 involved alleged defense contractor fraud.  Raytheon agreed to pay $950 million in aggregate and a $432 million defense contractor settlement to resolve allegations that it misstated its costs in a costs plus contract thereby overbilling the federal government, and also engaging in bribing of a foreign entity a violation of the Foreign Corrupt Practices Act (FCPA). The whistleblower was represented by Brown, LLC and was the largest False Claims Act settlement of the year.

Statistics of Recoveries Under the False Claims Act

The Department of Justice collects and releases statistics under the Civil Division for fraudulent claims. Of the $2.9 billion that was recovered under the False Claims Act, over $400 million was provided to the whistleblowers under qui tam filings. $1.67 billion of total fraud claims in FY24 was compromised of healthcare related fraud, such as Medicare, Medicaid, and TRICARE programs. In total, there were 979 qui tam lawsuits filed, the highest number in a single year. The government and whistleblowers were party to 558 settlements and judgments, second only to the previous year of 566 recoveries.

The total number of qui tam cases has grown significantly since 1986 when the False Claims Act was amended to allow whistleblowers to more easily come forward. The average number of cases filed in FY24 was 18 cases a week. For cases which the government intervened, the total awarded was $2.1 billion. Non-intervened cases accounted for more than $217 million. The Principal Deputy Assistant Attorney General acknowledged the whistleblower’s efforts leading to the successful results of FY24:

“Whistleblowers play a critical role in identifying fraud schemes…We continue to be grateful for their efforts and often substantial sacrifices to uncover and report these schemes.”

Key Takeaways

While hundreds of millions of dollars are awarded to whistleblowers each year, your False Claims Act case value depends on numerous factors: the size of the fraud, where you file, how quickly you act, and the quality of your legal representation.

Partnering with an accomplished whistleblower law firm like Brown, LLC can significantly improve your chances of success. With DOJ alumni on staff and a track record of multi-million-dollar recoveries, Brown, LLC can help you navigate the complexities of whistleblower litigation.

Ready to discuss your potential FCA case? Contact Brown, LLC today for a free, confidential consultation and take the first step toward holding fraudsters accountable.