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Whistleblowers and the False Claims Act.


Whistleblower:  Anyone with information about how the federal government or state governments have been or are being defrauded through false or fraudulent claims can be a whistleblower.  Whistleblowers who file False Claims Act cases on behalf of the federal government or state governments can recover a percentage of the money recovered.

The False Claims Act

The False Claims Statute


What is a False Claim?  A false claim may be factually false or legally false.  A factually false claim contains a false statement which is material to the government's decision to pay the claim.  Examples include claims where a contractor says it provided the government with a product that it did not actually provide, or claims that a contractor worked 8 hours when the contractor only actually worked 4 hours.  Legally false claims are claims for which payment has been prohibited by law even if the work to be done has been done or the product to be provided has actually been provided.  Examples of legally false claims include claims to Medicare which have been induced by illegal kickback payments or claims made to Medicare for prescription medications which were marketed by pharmaceutical manufacturers to physicians to be used for "off label" purposes not approved by the Food and Drug Administration.

How the False Claims Act Works:  The False Claims Act works by providing incentives to whistleblowers to file FCA cases on behalf of the federal government or state governments.  The government investigates the whistleblower's allegations and decides whether or not to intervene in the case and take it over.  If the government decides to intervene in the case, then the government controls the litigation.  If the government decides not to intervene in the case, then the whistleblower can continue to litigate the case on the government's behalf.   

State False Claims Acts:  Many states have a False Claims Act, most of which are based on the federal False Claims Act.  All state False Claims Acts allow the whistleblower who filed the case to be paid a percentage of the state's recovery.   

The definition of the False Claims Act


“The False Claims Act (31 U.S.C. §§ 3729–3733, also called the "Lincoln Law") is an American federal law that imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. The law includes a "qui tam" provision that allows people who are not affiliated with the government to file actions on behalf of the government (informally called "whistleblowing"). Persons filing under the Act stand to receive a portion (usually about 15–25 percent) of any recovered damages. Claims under the law have typically involved health care, military, or other government spending programs, and dominate the list of largest pharmaceutical settlements. The government has recovered nearly $22 billion under the False Claims Act between 1987 (after the significant 1986 amendments) and 2008.[1]”

Overview of Qui Tam Cases


Filing Process:  Qui tam cases are filed in court under seal, and complaints in such cases are served on the government or governments on whose behalf the relator has sued.  The government then generally investigates these cases in confidence while it decides whether or not to intervene in the case and take control of the case.  The relator's complaint normally is unsealed once the government decides whether or not to intervene.

Whistleblower Rewards:  Under the federal False Claims Act and most state False Claims Acts, a whistleblower who files an FCA case is entitled to 15-25 percent of the government's recovery if the government intervenes in the case and takes it over, or 25-30 percent of the government's recovery if the government does not intervene in the case.

Qui Tam Law


What is a Qui Tam Lawsuit?  A qui tam case is a False Claims Act case filed by a whistleblower (also known as a relator) on behalf of the federal government and/or state governments.  The term "qui tam" indicates that the case is brought on behalf of the government.

Who are Relators:  Relators are whistleblowers who file False Claims Act or qui tam lawsuits.  There are no special qualifications restricting who can be a relator in a False Claims Act case. 

Common Fraud Schemes Include

  • Pharmaceutical Industry

  • Healthcare/ Medicare

  • Financial Industry

  • Procurement

  • Defense Industry

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