False Claims Act

The federal False Claims Act authorizes a private individual, known as a “relator,” to bring a cause of action on behalf of the government to recover money lost due to fraud or other misconduct. A lawsuit filed under the False Claims Act is known as a qui tam action, a legal concept that first originated in England. A qui tam action allows an individual to sue on behalf of the government and receive a percentage of the recovery.

Whistleblower lawsuits help our government recover billions every year. The government rewards successful whistleblowers for bringing fraud to their attention.

In fiscal year 2017, the Department of Justice recovered over $3.7 billion from False Claims Act cases. Of the $3.7 billion in settlements and judgments, $3.4 billion was related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $392 million to the individuals who exposed fraud and false claims by filing a qui tam complaint.

If you have evidence of a fraud against the government, contact one of our False Claims Act attorneys.

Filing a Complaint Under the False Claims Act

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 Department of Justice decides to intervene in the case, they will prepare and file their own complaint. If they decline, you are entitled to proceed with the litigation on behalf of the government. There are certain situations when a relator is not entitled to bring a lawsuit. An attorney at McEldrew Young can help determine whether one of these exceptions applies 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 cannot proceed if a government civil or administrative monetary proceeding has been filed.
  • Public Disclosure Bar – A False Claims Act lawsuit cannot be based upon information already disclosed to the public unless the relator is the original source of the information.

Retaliation Protections

The federal False Claims Act offers protection from employer retaliation when a whistleblower brings a qui tam lawsuit. Section 3730(h) of the False Claims Act 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 subjected to discriminatory action as a result of their whistleblower status, he or she is entitled to bring a cause of action in federal district court for double back pay, interest, and compensation for special damages (e.g. litigation costs and attorneys’ fees). The anti-retaliation provisions of the False Claims Act protect whistleblowers for three years from the date of retaliation. Other laws, including state and local false claims act laws, may provide additional anti-retaliation protections for the relator bringing a qui tam complaint.

Confidentiality Under the False Claims Act

A lawsuit under the federal False Claims Act begins with a complaint filed under seal. This procedure prevents public disclosure of the lawsuit and allows the government to investigate the allegations of fraud before the defendant becomes aware of the action. During this period, the identity of the whistleblower is known only to government investigators and, in some cases, the court. The whistleblower must maintain strict confidentiality regarding the lawsuit. After the government has investigated and decided whether it will intervene in the case, the lawsuit is unsealed and the identity of the whistleblower becomes public knowledge in most cases. If you would like to report any of the following, contact our team of lawyers at McEldrew Young today:

Health Care Fraud

Although the federal government takes steps to discover health care fraud on its own, whistleblowers play an important role in bringing fraud to the attention of the government. The False Claims Act allows private individuals to bring qui tam lawsuits on behalf of the federal government to recover money.

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Government Contracts and Procurement Fraud

The False Claims Act allows the federal government to recoup payments made to contractors as a result of false statements in the acquisition or performance of a government contract. Whistleblowers are instrumental in pointing the Department of Justice in the right direction.

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Mortgage Fraud

We can help you report bank fraud involving the housing and mortgage industry. The United States has three laws, the False Claims Act, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), and the Financial Institutions Anti-Fraud Enforcement Act (FIAFEA) which provide compensation to eligible whistleblowers for information that results in a monetary recovery.

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Customs Fraud

Customs fraud allows companies to circumvent protections for domestic manufacturers and gain a price advantage against honest competitors who pay the required duties to the government. 

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Small Business Contract Fraud

Because of the important role small businesses play in the nation’s economy, the Government attempts to funnel business opportunities to them when the contract does not require the services of a large company. Companies that do not qualify for these opportunities have nevertheless sought to take advantage of them. The government cannot possibly verify every detail provided by these businesses so it relies on whistleblowers to inform them when a business is committing fraud.

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Davis Bacon Act

Contractors and subcontractors performing on federally funded or assisted construction contracts on public buildings or public works must pay the local prevailing wage to covered employees. The law covers an expansive amount of public projects. Construction projects or improvements on highways, airports, railways, subways, streets, and power lines are all covered. The prevailing wage for their employees is determined and set by the Department of Labor for each area. Contractors are allowed to pay their employees more, but they cannot pay less.

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Education Fraud

Whistleblowers can play an important role in fighting education fraud. The False Claims Act permits private individuals, known as relators, to bring a qui tam lawsuit on behalf of the federal government to recover money lost due to fraud and other misconduct. 

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False Claims Act FAQs

What is 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.
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