Common Fraud Questions

What is the False Claims Act?

The False Claims Act, 31 U.S.C. §§3729-3733 (the “FCA”), imposes liability on anyone who knowingly submits, or causes another person to submit, a false claim to the government for payment. Pursuant to the Act, the government is entitled three times its damages, and civil penalties of up to $11,000 per false claim.

Who can be a whistleblower?

The FCA contains qui tam, or whistleblower, private right of action provisions as well. Any individual who uncovers fraud against the government may file a lawsuit on behalf of the government. The whistleblower, also known as the Relator, may receive a percentage of any recovery obtained by the government.

How will a whistleblower be compensated?

Under the provisions of the False Claims Act, the whistleblower can receive 15% to 30% of the amount recovered by the government. The specific percentage is determined on a case-by-case basis using the Justice Department’s Relator’s Share Guidelines.

What protections are given to a whistleblower?

There are many protections offered to whistleblowers who bring qui tam suits. The lawsuits are filed under seal, which means the relator’s identity will be kept a secret, even from the defendant, while the government investigates the validity of the claim.

Often, potential Relators are hesitant to report their employers’ conduct out of fear of losing their job or being targeting in some other way. For this reason, the False Claims Act prohibits an employer from retaliating against an employee who blows the whistle. The employer cannot fire, demote, harass or discriminate in any other way against an employee for engaging in acts in furtherance of a qui tam action. If the employer does act against a whistleblower, he or she can file a civil lawsuit alleging retaliation and will be entitled to two times back pay and reinstatement, among other remedies. The employee whistleblower must be able to prove that the employer knew that the employee was engaged in acts in furtherance of a qui tam action.

Why are Qui Tam cases filed “under seal,” and what does that mean?

Qui Tam cases are required by law to be filed “under seal.” This means that the contents of the lawsuit are not disclosed to anyone, including the defendant(s), except for the government attorneys and the court where the suit is filed. The seal allows the government to investigate the claims made in the lawsuit without the defendant(s) knowing that the investigation is being conducted.

How long does it take for Qui Tam cases to get resolved?

How long a case takes to get resolved varies depending on the facts of the case, the scope of the fraud, how long it takes the government to investigate and determine if they are going to intervene, whether the government intervenes, the outcome of any settlement negotiations with the defendant(s), and whether a trial takes place. Cases can be resolved in as little as a few months, or can take several years. The average length of time for successfully intervened cases is difficult to know, but appears to be in excess of three years.

Will my case go to trial?

Most qui tam cases do not go to trial. However, the Relator and his or her counsel must prepare for each case as though it may end up at trial. Cases should be evaluated by counsel at the outset as if they will go to trial.

What role will I have in the case after it is filed?

The Relator and his or her counsel will be active partners with the government agents who are investigating the case. This will involve meeting with investigators and may further involve reviewing documents, identifying potential witnesses and providing contact information, and assisting with preparations of subpoenas, affidavits, and search warrants. The more successful qui tam lawyers know that they must take an active, ongoing role in the case and constantly find ways to aid and assist the government attorneys throughout the process, however long the case endures. Inexperienced lawyers sometimes file qui tam actions and believe they can “sit back” and do nothing, relying completely on the government attorneys to establish False Claims Act liability. It is certainly unwise and can be fatal to the success of the case for the relator’s counsel to do this. Instead, your qui tam counsel should persevere and take the most active role possible in the case, keep thoroughly up to speed on the progress of the matter, and aid and assist the investigators and government attorneys all along the way. Not only does this greatly enhance the outcome, it justifies a higher percentage of the relator’s share at the conclusion of a successful case.

Will my employer find out that I have filed a Qui Tam case against them?

Eventually, yes. While the government investigates the claim, the case is under seal and the defendant will not know that a case has been filed. At some point, the seal will be lifted and the case will be made public. This may be to allow the government to enter into settlement negotiations with the defendant, to prepare to take the case to trial, or because the government has decided not to intervene in the case. On rare occasions, courts have sometimes agreed to seal qui tam cases that were filed and not intervened in by the government, after the relator decided not to pursue the case following the decision of non-intervention. The trend in the law, however, has been to make such cases public even when the relator has chosen not to pursue the case and desires that it remain sealed. You should not expect that a court will agree to seal a non-intervened case and instead should expect that at some point, the defendant will learn about the filing.

The company I work for has a “Whistleblower Hotline.” Should I use the hotline to report my concerns about potential fraud?

Many companies maintain such programs, in part because they may be operating under a Corporate Integrity Agreement due to past fraudulent conduct, or proactively to potentially later show the government that they have been mindful about preventing fraud, waste and abuse. Making reports to company hotlines, whether anonymously or not, can have implications on a potential whistleblower case. For this reason, you should consult with an experienced qui tam attorney before reporting the fraud to your company.