Do you know of fraud being committed upon the government? Then, we can help. Email fraud@jgllaw.com.
Fraud against the government is very serious and also very harmful. Fraud against the government:
- threatens important government programs such as national security, Medicare, Medicaid, and social security by stealing from these programs’ limited budgets;
- costs taxpayers billions of dollars each year; and
- results in a loss of confidence by the general public that its government is running efficiently and effectively and that contractors are honest and trustworthy.
Did you know that by law (the False Claims Act) there is a process of reporting fraud that must be rigorously followed? Reporting fraud is a complicated matter, and you will need experienced attorneys such as Steve M. Pavsner, Jay P. Holland, Timothy F Maloney, Brian J. Markovitz and the attorneys at Joseph, Greenwald & Laake, P.A. to assist you. Here is some information about the whistleblower process, as required by law under the False Claims Act, as well as some main topics of interest.
- What are my rights as a whistleblower ("Relator")?
- What types of fraud are covered?
- What is a qui tam action (claim under the False Claims Act ("FCA")) and what is the origin of the act?
- What are the penalties to wrongdoers who violate the False Claims Act?
- How does the process work?
- Do I really need a lawyer? Yes!
1. What are my rights as a whistleblower (“Relator”)?
The Monetary Reward
Congress intended to encourage whistleblowers (known under the False Claims Act or FCA as a “Relator”) who are aware of fraud to expose this fraud to the appropriate authorities by extending to them monetary rewards. The monetary awards that a Relator receives range from a minimum of 15% to a maximum of 30% of what is recovered by the government through a settlement or successful prosecution of an FCA claim. Therefore, for instance, if the government were to recover one million dollars in a settlement with a contractor, the Relator would receive at least $150,000.00 and no more than $300,000.00.
Personal Injury
While you do not have to have been personally harmed by the fraudulent conduct to file a suit, the FCA also protects whistleblowers who lose their jobs as a result of bringing the fraud to light. The FCA allows any individual to bring a private suit against his or her employer for retaliation because that individual participated in an FCA investigation or court proceeding. A successful retaliation claim results in the individual receiving: (1) an award of double his or her lost back pay plus interest; (2) litigation costs and attorneys’ fees; and (3) even reinstatement, if the employee wishes to return to work, with the same seniority status the employee would have had if the retaliation had not occurred.
2. What types of fraud are covered?
In general, the FCA covers fraud involving any federally funded contract or program, except tax fraud, so long as the wrongdoer has made false or fraudulent claims for payment to the United States. Many different scenarios can constitute FCA violations. Examples include the following: a health care provider billing Medicare or Medicaid for services it did not provide or that were unnecessary; a contractor providing fraudulent documents falsely stating it is qualified to enter into a government program and bid upon certain government contracts; a grant recipient billing the Government for costs that are not associated with the grant; and a contractor hiding excess and fraudulent charges in the bills it submits to the government.
The following areas of government programs listed below, which by no means represent an exhaustive list, may result in a whistleblower raising a fraud claim under the False Claims Act:
- Procurement
- Defense Contractor work
- U.S. General Services Administration Contracts and Schedules
- Medicare & Medicaid contracts
- Nursing Home operations
- United States Grants & Loans
- Public works and government construction projects and
- Research programs.
3. What is a qui tam action (claim under the False Claims Act (“FCA”)) and what is the origin of the act?
What “Qui Tam” Means
From the FCA’s enactment, it has carried a “qui tam” provision, short for the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, which literally translates into “Who brings the action for the King as well as for himself.” In short, what this phrase means and what you would be doing as a whistleblower is acting in the place of the government and representing its best interests.
History of the False Claims Act
The FCA has a long history. In 1863, after being strongly pushed by President Abe “Honest” Lincoln, the FCA (known as “Lincoln’s Law”) was passed by Congress to recover funds from unscrupulous contractors who were selling faulty goods to the Union Army during the Civil War. The statute allowed for a whistleblower to initiate a civil suit and be paid a “finder’s fee” or a portion of the amount recovered for government. The finder’s fee was intended to help encourage whistleblowers to come forward to report fraud. Since it enactment, the FCA has undergone some changes but the main purpose of the act has remained─ to report and catch unscrupulous actors and return money stolen from taxpayers.
4. What are the penalties to wrongdoers who violate the False Claims Act?
The FCA packs a deserving punch to wrongdoers. The FCA provides liability for triple damages (or three times the amount of the fraud) and a penalty from $5,500 to $11,000 per claim for anyone who knowingly submits or causes the submission of a false or fraudulent claim to the United States. For instance, if a contractor was proven to have stolen $1 million dollars from the government and submitted ten false claims for payment, then that contractor would have to pay the government $3 million (three times the $1 million stolen) plus fines of between $55,000 to $110,000 (the fine rate of $5,500 to $11,000 multiplied per claim, which was 10).
Since 1986, FCA judgments and settlements against fraudulent actors have totaled over $12 billion.
5. How does the process work?
The process is very detailed and must be followed exactly in order to pursue a claim. The complaint must, by law, be filed under seal, which means that all records of the case are held in a secret area by the Clerk of the Court. While the matter is sealed, copies of the pleadings are provided only to the Relator (and Relator’s counsel), the United States Department of Justice, including the local United States Attorney, and to the judge and the judge’s staff.
In addition to the complaint being filed with the Court, the Relator must provide to the United States Department of Justice and the United States Attorney a “disclosure statement.” This disclosure statement must contain “substantially all” the evidence the Relator has concerning his or her allegations as explained in the complaint. The disclosure statement is not filed with the Court and is not available to the defendants. However, it is often a complicated document, consisting of many pages and attached documents.
All pleadings filed with the Court remain sealed for a period of at least sixty days. Usually, at the conclusion of this initial sixty days, the United States Department of Justice must, if it wants the case to remain under seal, request an extension of time from the Court, which is usually at six month intervals. The United States Department of Justice often requests more than one extension of the seal and many cases remain sealed for at least two years.
While the case is under seal, the United States Department of Justice is required to “diligently” investigate the allegations. The investigation usually involves at least one law enforcement agency such as the Office of Inspector General of the agency that was harmed and even the FBI. The investigation often involves subpoenas for documents, other record review, and witness interviews.
At the conclusion of the investigation, the United States Department of Justice chooses one of five options:
- Intervene in one or more counts of the complaint. By intervening the Government states to the Court that it intends to participate in prosecuting the complaint or certain counts of the complaint;
- Decline to intervene in one or all counts of the complaint;
- In rare instances, move to dismiss the Relator’s complaint;
- Attempt to settle the pending action with the defendant prior to the intervention decision; or
- Inform the Relator that it intends to decline to intervene.
If the United States Department of Justice declines to intervene in the case, the Relator may move forward with the action on behalf of the United States. In this instance, unless the government intervenes at a later date, the government will not participate in the prosecution of the case apart from its right to any recovery.
After the Relator’s complaint is unsealed, the Relator must serve the complaint upon the Defendant(s) within 120 days. Each defendant must file an answer to the complaint or a motion within 20 days after service of the government’s complaints. Then the normal litigation process begins.
6. Do I really need a lawyer? Yes!
As noted above, the False Claims Act process is complicated so you will need assistance helping you navigate the process. Also, several courts, including those in the District of Columbia, have ruled that a pro se (an individual proceeding without an attorney) Relator is barred from prosecuting a qui tam action. These rulings usually note that a Relator acting on his or her own would be acting as an attorney for the government, which is prohibited.
We urge you to contact us by (1) calling our convenient toll-free number 866-279-7600; (2) sending us an email
