False Claims
The Federal False Claims Act
The Federal False Claims Act ("FCA") 31 U.S.C. § 3729 et seq. allows private citizens who know of an individual or company that has financially defrauded the federal government to come forward and file a civil lawsuit to recover damages on the government’s behalf. Sometimes called "whistleblower" or qui tam lawsuits, these cases under the False Claims Act provide a way for private citizens to share in the recovery of damages recovered. The term "qui tam" is an abbreviated version of the Latin phrase "Qui tam pro domino rege quam pro se ipso", which means, “Who sues on behalf of the King, as well as for Himself.”
A qui tam suit is brought by an individual (also known as a "relator") on behalf of the United States government seeking to expose and stop government fraud. The False Claims Act covers a wide variety of situations, including but not limited to:
- Preparing a false record or statement or bill in order to get a false or fraudulent claim paid by the government. For example, the submission of false claims to Medicare or Medicaid;
- Conspiring with anyone else to have a false or fraudulent claim paid by the government;
- Creating or delivering a false or fraudulent receipt to the government for its property;
- The submission of claims for defective or substandard parts under a government contract;
- The non-disclosure by a contractor of costs during the bidding process for a government contract;
- Making a false statement to fraudulently avoid paying a debt to the government or to avoid delivering property to the government;
- "Reverse false claims" – This is where a false statement is made which has the effect of depriving the government of revenue which it is due.
A whistleblower lawsuit is filed under seal, so that it is not disclosed to the public and cannot be discussed with anyone except government officials. Because it is filed under seal, not even the defendants are aware of the case. The purpose of “sealing” the lawsuit is to permit the government to conduct an investigation of the alleged fraud without interference from the defendants. At the end of the seal period, the government decides whether to join the case. If the government joins the case, the lawsuit is unsealed, a copy is served on the defendants, and the government and relator work together to prosecute the case. If the government decides not to intervene, the relator may choose to prosecute the case on his own.
First to File RuleIn order to encourage citizens to come forward as soon as possible, the FCA creates a race to the courthouse. The first person with credible information about a specific fraud to file a qui tam action is the only qui tam relator allowed in that case. No court can have jurisdiction over a case where there is already another pending case on file involving the same fraud allegations. Thus, time is of the essence and it is critical that you be the first to file the lawsuit with these specific allegations of fraud.
DamagesThe False Claims Act provides that the government shall recover three times the amount of money it lost as a result of the fraud, plus a recovery of between $5,000 and $11,000 for each false claim submitted by the defendant. In addition, the defendant must pay the fees and the case expenses of the relator’s attorney.
Relator / Whistleblower’s AwardThe whistleblower typically receives between 15% and 25% of the total government award. In some cases, the whistleblower may receive up to 30% of the total government award. This amount varies, depending on whether the government intervened in the action and other factors.
It is important to note that the FCA provides protection to employees who come forward and expose fraud being committed by their employer. Any retaliation by an employer against an employee is illegal and proscribed by the False Claims Act. If you have knowledge of an individual or company that has defrauded the federal government contact the attorneys of Belt Law Firm today at 888-933-1514 for a free confidential consultation.