The False Claims Act is 31 U.S.C. Sections 3729 through 3733 . Qui tam , under the False Claims Act, allows persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States Government. In Qui tam actions, the government has the right to intervene and join the action. If the government declines, the private plaintiff may proceed on his or her own. Some states have passed similar laws concerning fraud in state government contracts.
- Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment;
- Knowingly using (or causing to be used) a false record or statement to get a claim paid by the federal government;
- Conspiring with others to get a false or fraudulent claim paid by the federal government;
- Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.
The “relator” is another word for whistleblowers. It originated in the False Claims Act whistleblower reward law signed by President Abraham Lincoln on March 2, 1863, during the Civil War. The term “relator” is the term used in the statute to identify the original source of the frauds against the government. The term “whistleblower” was not in use in 1863. Consequently, in modern whistleblower reward laws, the term “relator” is often used by the Courts and parties to signify a whistleblower.
Any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit. However, if the government or a private party has already filed a False Claims Act lawsuit based on the same evidence as you, you cannot bring a lawsuit.
A qui tam action must be confidentially filed under seal in federal district court in accordance with the Federal Rules of Civil Procedure. A copy of the complaint, with a written disclosure statement of substantially all material evidence and information in the plaintiff's possession, must be confidentially served on the US Attorney General and the US Attorney for the district in which the complaint is brought. An action under the False Claims Act must be filed, in camera and under seal. The complaint and its contents must be kept confidential until the seal is lifted. The complaint is not served on the defendant. If the plaintiff violates the provisions of the seal, his or her complaint could be dismissed.
Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim. A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or settlement. To be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough. You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.
Under the False Claims Act, an action must be filed within the later of the following two time periods: Six years from the date of the violation of the Act; or Three years after the government knows or should have known about the violation, but in no event longer than ten years after the violation of the Act. (One Circuit Court has interpreted the second provision as requiring that the action be filed no later than three years after the qui tam plaintiff rather than when the government knows, or should have known about the violation.)
Under Section 3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole. Such relief may include:
- Double back pay
- Compensation for any special damages including litigation costs and reasonable attorneys' fees.
You should be aware, however, that the scope of whistleblower protection under Section 3730(h) is an issue that currently divides the courts. Many states have wrongful discharge or other employment laws that may provide other remedies for such discrimination.
The Statute of Limitation for filing a FCA retaliation case is different then that for filing a qui tam recovery case. A FCA retaliation case must be filed under the statute of limitation applicable to the most closely analogous state statute.
Due to the success of the Federal False Claims Act, a growing number of states including New York, California, and Virginia, have enacted State versions of the False Claims Act. These laws permit whistleblowers to recover a “finders’ fee” for reporting fraud in state, local, and municipal contracting.
In 2006, Congress amended the Internal Revenue Code to permit whistleblowers to obtain a reward for reporting tax fraud.
The importance of using financial incentives to promote corporate fraud disclosures was underscored in a scholarly study of published in the Boston University Law Journal . This study analyzed several possible methods of incentivizing whistleblowing and concluded that a qui tam model provides the greatest incentive for the whistleblower while exposing information that the government would not be able to detect on its own. " qui tam cases bring out important inside information. Potential qui tam plaintiffs can offer information about inchoate or ongoing malfeasance of which law enforcement is unaware." After examining the potential disincentives that qui tam whistleblowers may confront, the article notes that "the bounty a relator stands to gain does, in many cases, outweigh the disincentives to being a whistleblower."
If you need additional help or want to contact an attorney, please fill out a confidential intake form. You can also visit the NWC Legal Assistance Program page.
Whistleblower attorney and Executive Director of NWC wrote a series on False Claims act entitled "25 False Claims Act Facts." Please read it to gain insight on the act.
For additional information on qui tam and the False Claims Act please read Rules 1, 3, 6, and 30 and review Checklists 1 and 4, published in The New Whistleblower's Handbook: A Step-by-Step Guide to Doing What's Right and Protecting Yourself (Lyons Press, 2017). An online resource for the Whistleblower handbook is available free of charge. It is indexed to the specific rules and contains links to the relevant statutes and key cases . The online resource is available here...
If you have a question for the author of The New Whistleblower's Handbook you can reach him at SK@KKC.com and submit your inquiry.
The material in this FAQ may not reflect the most current legal developments. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this website or in this FAQ. Before acting on any information or material in this web site, we strongly recommend you seek a qualified whistleblower attorney.