The False Claims Act is also known as the "Lincoln Law," signed into effect during the American Civil War as a reaction to contractors selling the Union Army things like sick horses and mules. Designed to help U.S. taxpayers recover money that has been stolen from the federal government, the law allows any person who has information regarding a false claim to bring a whistleblower lawsuit against the company or organization that committed the fraud.
The False Claims Act holds anyone who knowingly provides false claims to the government financially accountable. The law contains a "qui tam" (pronounced "kee tam" or "kwee tam") provision allowing private citizens with knowledge of fraud against the United States government to file a lawsuit on behalf of the government. These patriotic citizens are rewarded by a substantial share in any financial recovery that is made.
Who can be a whistleblower?
Whistleblowers serve an important role in helping the government ensure that taxpayer money is not being stolen through fraudulent, unethical, or deceitful business practices.
Any person with knowledge of a scheme to defraud the government may be able to file a whistleblower lawsuit. Frequently, the whistleblower is an employee who blows the whistle on his or her employer, as these are often the persons first acquainted with the fraud and best able to procure evidence of it. Independent contractors, subcontractors, and competing businesses or organizations are also known to file false claims cases. Whistleblowers may also be corporations, public interest groups or other private organizations. The person or entity filing the lawsuit need not have been personally harmed by the company’s conduct.
How much can a whistleblower receive for filing a lawsuit?
Qui tam whistleblowers are entitled to 15% to 30% of the government’s total recovery. For successful cases in which the government intervenes in litigation, the whistleblower is entitled to 15% to 25% of the recovery. For successful cases in which the government does not intervene, the whistleblower is entitled to 25% to 30% of the total amount recovered.
What does "qui tam" mean?
The False Claim Act contains a legal device known as a "qui tam" provision. The term qui tam comes from a Latin phrase roughly meaning "he or she who brings a case on behalf of the King, as well as himself or herself." The FCA itself makes the fraud itself punishable by substantial financial penalties; the Qui Tam provision allows private citizens to file a lawsuit on the government’s behalf.
What types of activities are covered under the False Claims Act?
Under the False Claims Act, a company, organization, or individual can be held liable for:
- Knowingly presenting (or causing to be presented) a false claim to the government for payment or approval
- Knowingly making, using, or causing to be made or used a false record or statement to submit a fraudulent claim to the government
- Falsely certifying the type or amount of property to be used by the government
- Knowingly making, using, or causing to be made or used a false record to avoid or decrease an obligation to pay or provide goods or services to the federal government
Who is a relator?
A person who files a whistleblower suit is referred to as a "relator" under the False Claims Act.
What is the federal government’s role?
Under the False Claims Act, the government has the primary responsibility for prosecuting the case. After the suit has been filed, the Attorney General’s office or the Department of Justice will investigate the allegations contained in the case. This investigation may involve one or more law enforcement agencies, such as the FBI or the Office of the Inspector General.
Following this investigation, the Department of Justice may intervene in the case. This means that the Department of Justice believes the whistleblower has a strong case and has exposed fraudulent activity. If the Department of Justice declines to intervene in the lawsuit, the whistleblower may proceed with the case and prosecute the lawsuit on behalf of the U.S. government.
What are common examples of fraudulent activities that have been the subject of whistleblower lawsuits?
Fraud that constitutes a violation of the False Claims Act can occur in any industry that enters into a government contract. Often, False Claims Act cases involve Medicare and Medicaid, healthcare fraud, or defense contractor fraud. Healthcare fraud cases may involve fraudulent cost reports, fraudulent billing, charging for unnecessary services, and kickbacks for patient referrals. Similarly, defense contractor fraud consists of a number of fraudulent schemes, such as cross-charging and product substitution.
Can fraud at colleges and universities be the subject of a whistleblower lawsuit?
Yes, higher education fraud often involves institutions of higher education that submit false certifications to secure accreditation. Colleges, universities, and other educations programs must be accredited by an authorized organization to receive government funds and receive tuition payment through the government loan programs. In recent years, for-profit colleges and online colleges have been accused of submitting false or misleading information to attain accreditation and therefore become eligible for student loan programs offered by the federal government.
What if I have information about a state government being defrauded?
Many state governments have laws that are similar to the federal False Claims Act. For example, the Florida False Claims Act imposes liability on corporations that knowingly present fraudulent or false claims for payment to the state. A whistleblower who files a lawsuit under the Act may receive between 15 and 30 percent of the amount recovered by the state government. The Florida statute also protects whistleblowers from retaliation by their employers.
How can my attorney protect me from retaliation by my employer?
The False Claims Act protects whistleblowers from retaliation. It is illegal for you to be discharged, demoted, suspended, threatened, harassed, or in any other way discriminated against for filing a whistleblower claim. If you are retaliated against for being a whistleblower, your attorney may file a lawsuit against your employer seeking reinstatement if you were terminated and twice the amount of back pay you lost as a result of the illegal retaliation.
Will my whistleblower lawsuit be kept secret? Can I blow the whistle anonymously?
A False Claims Act lawsuit is always filed confidentially and may not be viewed by either the accused (e.g., your employer) or the general public. While the investigation is ongoing, the accused will not be made aware of the investigation or who instigated the investigation. Even if the government chooses not to participate in the litigation of a particular claim, the whistleblower’s name will not be released. In certain cases, such as when the whistleblower is an essential witness in the judicial proceeding, it may not be possible to pursue the investigation without revealing the whistleblower’s identity. Consequently, a number of laws have been written into the False Claims Act to protect the whistleblower from harassment, discrimination or retaliation of any other kind from the defendant.
What are the potential damages and civil penalties for submitting false claims to the federal government?
Through a whistleblower lawsuit, the company, individual, or person that defrauded the government may be held liable for three times the amount of the fraud, plus a civil penalty of $5,500 – $11,000 per claim. In cases involving Medicare fraud, the amount of the civil penalty can be quite large, because each fraudulent Medicare invoice is considered a separate claim.
How much will filing a lawsuit cost me?
The whistleblower attorneys at Morgan & Morgan work on a contingency fee basis, which means our attorneys only receive a fee if you receive a financial reward from the government. Morgan & Morgan will pay for all expenses associated with the whistleblower lawsuit, including travel costs and the costs associated with hiring expert witnesses that may be needed to help prove your case.
Does Morgan & Morgan have the resources and experience necessary to litigate major whistleblower lawsuits?
Yes, with more than 300 attorneys, Morgan & Morgan is one of the largest plaintiff’s law firms in the country. We have helped employees, executives, healthcare professionals, and other individuals expose illegal schemes to defraud the government and recover financial awards for their efforts. Our attorneys, along with our team of former FBI agents, know that it takes great courage to come forward, and can explain your legal rights, protect your confidentiality and ensure you receive the maximum financial award allowed by law.