The False Claim Act: How It Works for Whistleblowers

March 23, 2022


The False Claim Act, also referred to as the “Lincoln Law,” is a very well-known whistleblower law utilized by some of the best whistleblower law firms resulting in hundreds of millions of dollars of whistleblower awards each year. This qui tam statute allows private citizens through the use a False Claims Act law firm to file a qui tam lawsuit against an organization, individual, or entity defrauding the government.

The whistleblowers can recover a percentage of the penalties and damages that the government recaptures. The federal government will evaluate the claims in the lawsuit and if the violations alleged are proven true then the whistleblower award under the False Claims Act can be up to 30% of the government’s recovery and certain states like California’s False Claims Act and Illinois False Claims Act allows a whistleblower award up to 50% of the recovery! All the False Claims Act statutes, Federal and State have mechanisms to combat retaliation.

It is essential to understand the False Claim Act and consult a whistleblower attorney if you are considering blowing the whistle on your company or any individual you know is committing systemic fraud against the government.

What Is The False Claim Act?

The False Claims Act (FCA) is the first and strongest whistleblower law in America. It was originally signed by President Abraham Lincoln in 1863 during the civil war, which is why it is sometimes referred to as the Lincoln Law.

During the time of war, opportunistic individuals such as suppliers were providing substandard services and goods to the troops which put their safety into jeopardy for the profits of the wrongdoers. The FCA was passed to target the systemic fraud committed against the government.

Since then, the Act has undergone multiple revisions and become more powerful than ever before resulting in billions of dollars a year recovered each year for the last decade and hundreds of millions of dollars of whistleblower awards each year. One element that remained unchanged is the whistleblower or qui tam provision. This provision enables any non-governmental organization or individual to file a lawsuit in the district courts on behalf of the United States government through the use of a whistleblower law firm.  The Courts have explicitly prohibited individuals from filing whistleblower lawsuits by themselves or pro seas it has the potential to create bad law and precedent for the government and the investigating arm of the government desires to interface with experienced whistleblower counsel as they have limited time.

Whistleblowers are protected from retaliation by the statute and their identity is kept confidential during the initial filing of the qui tam complaint as it must be filed confidentially under seal.  . Moreover, they stand the chance to obtain a whistleblower award for disclosing for revealing the fraud that has been causing financial losses to the government.

If the original information from the whistleblower leads to a successful prosecution, the whistleblowers may receive a whistleblower reward of anywhere between 15% and 30% of the overall collected proceeds. The rewards are substantial since the defendants are liable for treble damages and civil penalties under the FCA.

The FCA has been created to be expansive, and it:

  • Applies to any fraud or misconduct outside the country if it involves federal contracting, procurement, or spending,
  • Allows a wide variety of individuals to serve as a whistleblower, including NGOs and non-U.S. citizens, and
  • Synergizes the private-public partnership by enabling private whistleblower law firms to prosecute the civil portion of the qui tam litigation on behalf of the government.

Protection for Whistleblowers

The False Claims Act offers protection to whistleblowers under 3730(h). Any employee who gets harassed, demoted, discharged, or face any other form of retaliation from the suspected company or individual for taking action against them can file an employee discrimination lawsuit in federal court.   An experienced whistleblower law firm will take you through some of the likely outcomes and help prepare you for potential retaliation.  Since the initial complaint is filed under seal it is unlikely the defendant will know your identity, but it’s critical to insert what is commonly referred to as an H claim if there has been any retaliation if the individual properly reported the misconduct internally within the company.  It is critical to have an experienced whistleblower attorney involved in the process as early as possible to protect your rights.

A retaliation lawsuit may be filed either as a stand-alone or within the qui tam lawsuit itself. The law offers complete “make whole” relief and permits a jury trial, including double back pay, reinstatement, as well as compensation for damages, including attorney’s fees for the whistleblower lawyers and litigation costs.

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How Does The False Claims Act Work – How is it Filed?

A qui tam lawsuit under the False Claims Act has to be filed under seal confidentially in federal district court according to the Civil Procedure Federal Rules and must be filed through the use of a whistleblower attorney

The copy and written disclosure of complete information and evidence that the plaintiff has possessed must also be served confidentially to the US Attorney in the District the case is filed and the US Attorney General in Washington DC..

This case stays under seal for the initial 60 days, during which the government investigates the allegations. In many cases, this seal gets extended for months and in most cases for years. There are severe potential consequences for violating the seal, including potential dismissal of the case – so remember loose lips sink ships!

The information provided by the plaintiff acts as the basis of the investigation. If the case results in a recovery there is a potential for a whistleblower award which some whistleblowers have received significant compensation in year’s passed. 

Liabilities Under the False Claims Act

This act is broadly written to cover all kinds of fraud that could lead to the U.S. government suffering financial losses. Here are some of the violations identified under the Act. Any of these may potentially violate the False Claim Act.

  • False Claims: Creating a presentment or presenting false claims for approval or payment. These False Claims can be generated in a variety of ways, including Medicare Fraud, Medicaid Fraud, PPP Loan Fraud, Defense Contractor fraud, or kickbacks to name a few.
  • False Statements or Records: Causing, using, or making others use or create false statements or records to use as material to the fraudulent or false claim.
  • Conspiracy: Forming or being a part of any conspiracy to violate the act.
  • Conversion: Not returning all or any of the government property.
  • False Receipts: Delivering or making receipt of any government property without knowing whether or not it is accurate and factual information.
  • Unlawfully Purchasing Government Property: Purchasing any property from government employees who might not sell it lawfully.
  • Reverse False Claims: Causing, using, or making to use or making false statement or record material to any obligation of paying money to the government, or decreasing, avoiding, or concealing the obligation of paying any money to the government.
  • Kickbacks: Paying as an inducement to procure government business.  For example, Independent Contractors receiving a commission to generate Medicare Fraud or Medicaid Fraud Patients.
  • Self-Dealing: Steering individuals to a provider in which the entity fails to properly disclose it has a financial interest in.

Wrapping Up

The False Claim Act is a major weapon of the U.S government to combat fraud by allowing whistleblowers to file a case against any entity, individual, or organization defrauding the government. However, it is crucial for potential whistleblowers to carefully understand the Act before proceeding forward.

While the financial rewards for whistleblowers are substantial, whistleblowers are obligated to have sufficient evidence against the individual or company before filing the case. Consulting a whistleblower attorney is an essential first step to ensure everything goes smoothly.

The statute of limitations for the False Claim Act can vary depending on the nature of the cause and could be a minimum of six years. You should not rely on this writing to determine the statute of limitations.  The calculations to determine the statute of limitations of your case could be complex, which is another reason you should consult with whistleblower lawyers.

There is a tremendous upside for individuals who are aware of systemic fraud against the government to do the right thing and report the fraud.  There’s a downside in staying silent, since the government may think if you’re not part of the solution, you’re part of the problem and there’s both civil and criminal consequences to the FCA. If you are aware of systemic fraud against the government you should speak with an experienced qui tam law firm as soon as possible. Call the whistleblower law firm at Brown, LLC today at (877) 561-0000 for a free, confidential qui tam consultation, or email us at


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