False Claims Act

Our attorneys have helped whistleblowers report more than $2 billion in fraud to the U.S. Government.  Here are a few of the areas where lawsuits are being filed under the False Claims Act:

Health Care Fraud

Mortgage Fraud

Government Contracts and Defense Spending

Small & Minority Owned Business Incentives Fraud

Customs Fraud

And More ...


Eric Young

Jim McEldrew

Brandon Lauria

Our Track Record of Success

Qui tam lawsuits brought by McEldrew Young attorneys have returned more than $2 billion to federal and state governments and were hard fought against numerous Fortune 500 companies, in addition to smaller fraudsters who broke the law just the same. All in all, in addition to ensuring that our clients were vindicated and protected, we have also secured more than $50 million in whistleblower rewards for our clients.

Pfizer Medicare and Medicaid Fraud
One such case involved Pfizer, Inc., in which McEldrew Young’s Eric L. Young, served as co-counsel for 2 of the whistleblowers — the case resolved for $2.3 Billion. In that case, Pfizer agreed to plead guilty to criminal conduct in addition to the payment of both criminal and civil fines, penalties and damages after being faced with the substantial evidence presented by and through the whistleblowers and their attorneys which established that the pharmaceutical giant defrauded Medicare, Medicaid and other government-funded health care programs in connection with its market practices for four of its drugs.

Cephalon Medicaid Fraud

Eric L.Young, also served as co-counsel on behalf of Lucia Paccione, a former Cephalon sales representative who filed a qui tam complaint reporting America’s largest biotechnology Medicaid fraud case. The case involved unlawful off-label marketing by Cephalon of drugs including Gabitril, Actiq, and Provigil. On September 29, 2008, it was announced that Ms. Paccione’s qui tam complaint led to the federal and numerous state governments’ recovery of $425 Million in a Civil Settlement.

Denver Health & Hospital Authority

In January 2012, Denver Health and Hospital Authority (“DHHA”) agreed to pay $6.3 million to settle allegations that the DHHA submitted false claims to Medicare and Medicaid by improperly submitting claims for short hospital stays as though they were “inpatient” stays when they should have been billed as less expensive “outpatient” or “observation” stays.  The relator was represented by McEldrew Young attorneys.

Active, Unsealed Litigation

We can’t talk about our cases that are still under seal. Here are a few that we are presently litigating:

Novartis Cardiovascular Drugs
Novartis is accused of paying doctors to attend and lecture at sham speaker programs held by its cardiovascular division.  The United States Government and New York State have intervened in the lawsuit and are proceeding against Novartis based on the allegations it violated the Anti-Kickback Statute.

Pfizer Vfend
Our qui tam lawsuit accuses Pfizer of paying illegal kickbacks to doctors and engaging in off label marketing of Vfend.

The U.S. Government has paid more than $4 billion to whistleblowers under the False Claims Act since 1986.

The Federal False Claims Act authorizes individuals to bring a cause of action on behalf of the government to recover money lost due to fraud or other misconduct.  Whistleblower lawsuits help our government recover billions every year.  The government rewards successful whistleblowers for bringing fraud to their attention.  In Fiscal Year 2013, whistleblowers across the nation were awarded more than $300 million as a result of their qui tam lawsuits.

Amount of Payments to Whistleblowers Each Year (in Millions)

  • Total paid to relators under the Federal False Claims Act in the Fiscal Year

Cases Typically Involve:

Health Care Fraud – The health care industry is currently the largest source of government fraud litigated under the False Claims Act.  When companies improperly seek reimbursement from Medicare, Medicaid and other government health benefits programs, it will create liability if they do so knowingly or fail to report errors they discover.  Some examples include: sleep study fraud.

Defense Industry Fraud – The second largest source of False Claims Act claims is generally the defense industry.  The military purchases equipment and services from a variety of businesses.  When a company in the defense industry makes misrepresentations or submits fraudulent bills, it becomes liable to the Federal Government under the False Claims Act.

Mortgage Fraud – Financial institutions have been subject to government investigations and liability recently under the False Claims Act for fraud committed against federal housing programs.

Small and Disadvantaged Businesses – The U.S. Government gives incentives to small businesses and disadvantaged business owners on government contracts.  Fraudulent statements on the application or certification create liability.

Davis Bacon Act – Federal contractors covered by the law violate the law when they do not pay prevailing wages or submit fraudulent wage statements to the government.

Customs Fraud – Misrepresentations on customs declarations regarding the value of imports or the origin of goods that lead to underpayments of duties create liability.

The Federal False Claims Act Process

A complaint is filed under seal in an appropriate Federal District Court.  The Department of Justice is notified and investigates the allegations in the complaint.  If the Justice Department decides to intervene, they will prepare and file their own complaint.  If they decline, you are entitled to proceed with the litigation on behalf of the government.  A relator is not entitled to bring a lawsuit in several situations.  An attorney at McEldrew Young can help you determine whether one of these exceptions apply to you.

Criminal Conduct – A relator is barred from bringing suit under the False Claims Act if he or she has been criminally convicted for their role in the misconduct at issue.

First to File Bar – A whistleblower cannot proceed with qui tam litigation if another relator has already filed a complaint concerning the fraud.  The lawsuit also can not proceed if there is already a government civil or administrative money proceeding.

Public Disclosure Bar – A False Claims Act lawsuit cannot be based upon information that has already been disclosed to the public unless the relator is the original source of the information.

Retaliation Protections

The Federal False Claims Act offers protection from retaliation to whistleblowers bringing qui tam lawsuits under it.  Section 3730(h) prohibits adverse changes to the terms and conditions of employment as a result of lawful whistleblowing activities to stop violations of the False Claims Act.  If an employee is discriminated against as a result of their whistleblower status, they are entitled to bring a cause of action in federal district court for double back pay, interest and compensation for special damages such as litigation costs and attorneys’ fees.  The anti-retaliation provisions of the False Claims Act are available to whistleblowers within three years of the date of retaliation.  Other laws, including state and local False Claims Act legislation, may provide additional anti-retaliation protections for the relator bringing a qui tam complaint.

Confidentiality under the False Claims Act

Lawsuits under the Federal False Claims Act begin under seal.  The identity of the whistleblower is revealed only to the government investigators and the Court.  The whistleblower must maintain the confidentiality of the lawsuit as well.  After the government has investigated the case and made a decision regarding whether it will intervene, the lawsuit is unsealed and the identity of the whistleblower becomes known to the public.

Frequently Asked Questions

What is a qui tam?

Qui tam is an abbreviation from the Latin phrase “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur”, meaning “who as well for the [lord] king as for himself sues [proceeds] in this matter”. A qui tam action allows private citizens to file a lawsuit in the name of the federal or state governments charging fraud by contractors and others who receive or use government funds.

What is a relator?

A Relator is the name that commonly refers to the whistleblower plaintiff in qui tam action brought under the False Claims Act.

Do I have to be represented by an attorney?

Yes. To bring a qui tam under the False Claims Act the whistleblower, or Relator, must be represented by an attorney. Selecting an attorney that has experience with qui tam whistleblower lawsuits and the False Claims Act is vital to protecting your interest in this complicated area of the law.

What is a disclosure statement?

The Disclosure Statement is the document that must be filed and served upon the Department of Justice (“DOJ”), and contains substantially all the evidence the Relator has in her/his possession about the allegations set forth in the Complaint.

Does it matter if the DOJ intervenes?

Because the success rate of qui tam action where the DOJ decides to intervene is much higher than the success rate for qui tam cases that do not have government intervention. However, lack of government intervention does not necessarily mean the qui tam action will not succeed. Indeed, some of the qui tam cases with the largest settlements have lacked government intervention.

Will the government take my information seriously and investigate it?

Yes, by law under the False Claims Act, the Attorney General or a Department of Justice Attorney must investigate the allegations of violations of the False Claims Act. The investigation usually involves one or more law enforcement agencies, and state attorneys general with expertise and interest.  They will participate in the investigation, and work closely with the federal agencies when state agencies are victims.

What happens at the conclusion of the investigation?

The DOJ will either (1) intervene in one or more counts; (2) the DOJ will decline to intervene in one or all counts; (3) the DOJ will move to dismiss the Relator’s Complaint; (4) the DOJ will settle the qui tam action with the defendant prior to intervention or in conjunction with the intervention; (5) the DOJ will advise the Relator of their intention to decline intervention.

How much money could I get?

If the DOJ intervenes and recovers money through a settlement or trial, the whistleblower is entitled to receive 15-25% of the recovery. If the government does not intervene and the case continues then the whistleblower reward is between 25-30% of the recovery.

Why Philadelphia?

The Eastern District of Pennsylvania, located in Philadelphia, has seen some of the largest settlements and cases under the False Claims Act.  Overall, the U.S. Attorney’s Office here collected more than $2.3 billion in civil and criminal actions in FY2014 alone.  It is a popular location for filing qui tam lawsuits against companies in the health care industry given the presence of many of them in the area.  It also provides convenient access to New York City and Washington, D.C.

To report money lost by the U.S. Government because of fraud: