The False Claims Act Process & Whistleblower Reward
History of the False Claims Act
The False Claims Act (FCA), 31 U.S.C. 3729 – 3733 is a federal statute enacted in 1863 in response to defense contractor fraud during the American Civil War, and is also known as “The Lincoln Law.”
The False Claims Act is one of the most powerful tools available to the federal government for combating fraud against government contracts and programs. The False Claims Act’s qui tam provision, allows individuals – whistleblowers – with inside knowledge of fraud to sue on behalf of the government and as a potential rewards for their efforts, the citizen-whistleblowers or qui tam “relators” are entitled to 15-30% of the amount recovered by the government. In the last 22 years, the federal government has recovered more than $21 billion thanks to the efforts of qui tam whistleblowers and in turn has given hundreds of millions of dollars as whistleblower rewards.
In the fiscal year ending September 30, 2022, the Department of Justice obtained more than $2.2 billion in settlements and judgments from civil cases involving fraud and false claims against the government and over a hundred million dollars went to whistleblowers awards.
The whistleblower False Claims Act, a crucial legal mechanism designed to combat fraud against the government, empowers individuals who possess knowledge of fraudulent activities to step forward and initiate a qui tam lawsuit, making the whistleblower False Claims Act an essential tool for exposing wrongdoing and protecting taxpayer dollars.
Types of False Claims Act Cases
False Claims Act violations can arise in a variety of contexts, and can involve a wide range of industries and types of fraud – but the fraud has to be against the federal government to be actionable under the FCA:
- Defense Contractor Fraud
- Healthcare Fraud
- Pharmaceutical Fraud
- Medicare Fraud
- Medicaid Fraud
- Financial Industry Fraud with Government Backed Instruments
- PPP Loan Fraud
- Foreign Corrupt Practices Act and Global Whistleblowers
- State False Claims Acts
These are just a few examples of the types of False Claims Act cases that can arise. Violating the False Claims Act can result in significant penalties and damages. If you suspect that a company or individual is defrauding the federal government, it is important to speak with a qui tam whistleblower attorney who can evaluate your case and help you determine the best course of action.
The False Claims Act Process
A False Claims Act case is initially filed in federal district court “under seal.” The complaint and evidence in support of the whistleblower’s claims are only confidentially provided to the US Department of Justice, including the district United States Attorney, and the assigned district court judge. While the complaint is under seal – a period that is frequently extended – the Department of Justice will investigate the allegations. The DOJ will typically interview the relator and may subpoena documents, interview other witnesses, and consult with agency personnel and other experts, sometimes in collaboration with other law enforcement agencies.
The government must decide whether or not to intervene in the case. If the government intervenes in a whistleblower case, the government takes over the litigation. If the government does not intervene, the relator may continue the case on the government’s behalf, if the government doesn’t object and it’s before the Supreme Court if the relator can continue if the government seeks a dismissal.
The False Claims Act Violations
Violating the False Claims Act can result in significant penalties and damages. If you suspect a False Claims Act violation has occurred, it is advisable to consult with an attorney who specializes in this area of law. They can guide you through the process of reporting the violation and potentially filing a qui tam lawsuit on behalf of the government.
The False Claims Act Elements
- If multiple FCA cases are filed and pending on the same facts, only the first whistleblower to file a case is entitled to proceed. Because of the first-to-file rule, it is critical that a whistleblower with knowledge of fraud consult with experienced qui tam counsel as soon as possible.
- The FCA forbids retaliation against whistleblowers and allows whistleblowers to seek double damages and other remedies.
- Individuals who have participated in the fraud, but have not economically benefited from it may still be eligible for a whistleblower award. Even individuals who profited from it somewhat may be eligible, but may have unclean hands to the extent they are disqualified from an award.
- Successful whistleblowers receive from 15%-25% if the government intervenes, and from 20%-30% if it does not.
- The average intervened settlement is around $13 million dollars, the average non intervened settlement is roughly $3 million dollars.
These are some of the False Claims Act Elements that you should be on the lookout for.
False Claims Act Whistleblower Rewards
False Claims Act whistleblowers are eligible for substantial monetary rewards ranging from 15% to 30% of the total amount recovered. To be eligible for a whistleblower reward, you must have firsthand knowledge of the fraud and be the first to report it to a whistleblower law firm, preferably one that can work seamlessly with the Department of Justice.
Whistleblower Reporting Protections
Several laws provide legal protections to whistleblowers in order to encourage them to come forward and report wrongdoing. Employers are prohibited from retaliating against employees who report misconduct under the False Claims Act and other whistleblower laws..
If you report systemic Medicare Fraud, Medicaid Fraud, Defense Contractor Fraud, or Pharmaceutical Fraud, the case is initially filed confidentially under seal, which protects your identity from the Defendants. Other statutes, such as the AML whistleblower statute (Anti-Money Laundering), the SEC whistleblower, the NHTSA whistleblower, and the CFTC whistleblower statutes, may provide anonymity from beginning to end if a whistleblower attorney is used.
Provisions to Prevent Retaliation under the False Claims Act
The False Claims Act protects employees, contractors, or agents who are fired, demoted, suspended, threatened, harassed, or otherwise discriminated against as a result of lawful actions taken to stop FCA violations. Retaliation liability extends beyond one’s employer and may extend to others. Whistleblowers who have been wronged may be reinstated with the same seniority status they would have had if not for the discrimination, two times their back pay plus interest, and compensation for any special damages sustained, such as emotional distress, as well as attorney’s fees and costs. A retaliation case may be filed concurrently or separately with an FCA qui tam complaint.
Speak to a Qui Tam Whistleblower Attorney About Your Case
If you suspect that a company or individual is defrauding the federal government, you may want to speak to a qui tam whistleblower law firm like Brown, LLC. We can evaluate your case, help you navigate the legal process, and protect your rights as a False Claims Act whistleblower and provide free, confidential consultations.