Qui Tam - False Claims Act

Lawsuits brought by private citizens on behalf of the federal, state, or local government are called "qui tam" lawsuits.  A whistleblower, who brings a lawsuit on behalf of the government, is called a “relator.”  Qui tam actions often involve allegations of fraud by government contractors and/or participants in government programs.

Depending on which laws are being violated, most qui tam actions are brought under the federal False Claims Act, and/or similar state or local laws. The False Claims Act creates liability to the United States in part for "any person who knowingly presents . . . a false or fraudulent claim for payment or approval [or] knowingly makes . . . a false record or statement material to a false or fraudulent claim." 31 U.S.C. § 3729(a)(1). 

A False Claims Act lawsuit must be filed with the court in secret, or “under seal.”  While the case is under seal, the government investigates the relator’s allegations.  It is really important to a relator’s potential recovery that the matter be kept confidential during this time.  One of our qui tam lawyers may be able to advise you on these public disclosure rules. 

An investigation can last a few months or several years.  During this time, the relator provides information to the government through disclosures, document exchanges, and an interview.  It is helpful to have knowledgeable qui tam attorneys to guide relators through this investigatory process.  Once the government concludes its investigation, it then decides whether to join the relator in litigating the case, or whether to decline to intervene.  If the government declines, the relator than has a choice: voluntarily dismiss the action or proceed to litigate the case in court.  The decision of whether to continue litigating is an important one.  Nichols Kaster’s attorneys can help relators navigate these important decisions.

The False Claims Act provides relators with an incentive to blow the whistle.  A defendant that is found to have committed fraud against the United States government is liable for triple damages, (3 times the amount of damages the government sustained because of the fraudulent act), civil penalties, and attorneys’ fees and costs. The relator can recover between 15-30% of the amount recouped by the government.

The False Claims Act also contains an anti-retaliation provision prohibiting a defendant from discharging, demoting, suspending, threatening, harassing, or in any other manner discriminating against an individual because he or she assisted with a False Claims Act investigation or action.

If you have knowledge of fraud against the government, contact our attorneys to discuss your options.

Fraud against the government can occur in many different industries. The following are examples of the types of fraud that may implicate the False Claims Act across different industries:

• Healthcare fraud. Healthcare fraud enforcement restores funds to programs like Medicare, Medicaid, and TRICARE. Examples of healthcare fraud may include:
  • Providing kickbacks to physicians in exchange for referrals
  • Telemedicine fraud, including false billing or coding for services
• Defense/military contractor fraud. Examples of ways contractors may try to defraud the government include:
  • Failure to comply with contract terms
  • Product substitution
  • Substandard products/services
• Education fraud.  Schools may face FCA liability by making false promises in order to receive federal funds or failure to comply with the Higher Education Act. Liability may rise for things like:
  • Inflated job placement and graduation rates
  • Unlawfully paying bonuses to staff to increase student enrollment

These examples are for illustration purposes only and not an exhaustive list. It is important to discuss the specific facts of your situation with an experienced qui tam attorney to determine what claims you may have.