False Claims Act Lawyer

The False Claims Act is a law, that among other things, allows individuals to sue on behalf of the United States and obtain an award upon collection of any damages for fraud committed against the United States. The law was enacted to discover and fight fraud committed against the United States, to prosecute fraud committed against the United States, and to collect money when fraud is committed against the United States.

If you have any interest in filing a suit, the next step is to get in contact with an adept False Claims Act lawyer. Skilled and experienced lawyers can help you through the process.

What Are The Origins of the False Claims Act?

In 1863, during the Lincoln administration, there was a great deal of government contractor fraud committed against the Union Army. The government was sold guns that did not shoot and mules that were dead. All sorts of provisions were made and provided to the Union Army that simply did not do what they were supposed to do.

As a result, the initial False Claims Act was enacted. The False Claims Act went through many legislative changes between 1863 and 1986 when the modern version of the law was enacted and that’s the law – with some newer amendments – that is in use today. Because of the complexity of false claims case law, working with a False Claims Act lawyer who understands the issues in False Claims Act law will put the whistleblower in a better position as they file their suit.

Even though the history of the False Claims Act does go back to 1863, the modern body of law that generates all of the major cases under the False Claims Act is relatively new, dating mostly to the Amendments of 1986. This is true, even though the concept of being able to sue on behalf of the government and paying an award to those relators or plaintiffs who bring the cases forward is not new.

Who Is Able to File a False Claims Suit?

Any person except potential members of the armed services filing as part of their military service may bring a civil action with help from a False Claims Act attorney. This is part of the unique aspect of the False Claims Act, and the reason why it is potentially the most powerful law for individuals to fight fraud in the United States. Unlike almost every other kind of way of reporting fraud, an individual has the right to file their own case in federal court and pursue an action.

That is not available even under most whistleblower reward laws. It is a special right, and it is why the procedure of the False Claims Act is perhaps a bit more complicated and harder to understand than most laws. It is not just that a whistleblower has to report fraud to a particular government agency.

That is something that a whistleblower can do in other whistleblower programs such as the SEC whistleblower reward program or the Commodity Futures Trading Commission award program or even the IRS whistleblower program. Under those programs, a whistleblower reports to the government only. With the False Claims Act, an individual has the right to bring a case in court and to pursue that case in court on behalf of the government.

It is an unusual right, and it is sort of an exception to the normal rules of standing in bringing a case. Normally, one has to be the person who was defrauded or the person who was harmed or related to the person who was harmed or the representative of the company who is harmed to bring the case. This is an exception to that to help protect the government.

The person bringing the case does not have to be personally hurt. They just have to know about fraud committed against the government to file a case. Therefore, likely because of that, there are some unusual procedures involved to protect the government’s interest in filing the case. Those unusual procedures may not be familiar to most people who have experience in the court or have experience dealing with serious legal issues. They are a little esoteric and a little confined to the small world of False Claims Act law.

Filing a False Claims Act Case

A False Claims Act case must be filed under seal. While that provision is really intended to provide a period of time for the government to investigate any action, it may also provide some protection for the individual. While the case is under seal nobody really knows who filed it. This can provide whistleblowers with some period of time before they are identified by anyone. It can provide a crucial period for a whistleblower to obtain new employment at a company, which is not committing illegal conduct.

The seal of court is a serious matter. Violating the seal of the court would likely mean that the whistleblower would forfeit their award at the very least if they do so in any intentional way, so it is kind of an unusual procedure. The statute is a little misleading here as well. It says that the court case will remain under seal for 60 days, but it also says that that seal can be extended for a good cause shown.

First Three Steps

Every False Claims Act case usually requires three steps to comply with both the filing requirements in the court case and with the requirements of filing a case that is not based on public disclosures. What a whistleblower has to do is start out by providing disclosure to the government, usually the Department of Justice, and then the whistleblower turns around and files a complaint under seal.

Then, the whistleblower turns around and serves that complaint on the government along with “substantially all the evidence” they have in the matter to the government all over again. Kind of a three-step process actually, but it is done in order to try and preserve two things, one, the status of the plaintiff as being an original source of the allegations and, two, providing the government with the information immediately.

The plaintiff can establish themselves as an original source of the information and thereby overcome the public disclosure bar if, in fact, any of the facts come out publicly about the matter. When they file the case in courts, they have to do so under seal. There is another statutory requirement that they provide substantially all the evidence to the government.

In practice, while these are three different documents, the information in them is likely to overlap considerably. In fact, it is best if they completely overlap with regard to the allegations presented in the complaint. Sometimes, there is evidence that the whistleblower may have that would be provided only to the government and not provided within the four corners of the complaint, indeed most of the supporting evidence that a whistleblower may have is likely to be provided to the government in support of their investigation of the case.

Those are the first three steps of the case, an initial disclosure, a complaint and then a full serving of the disclosure and complaint from the government. Then, the case is under seal and the government investigates. The seal is really something that belongs to the government, but it can benefit the whistleblower to have the matter treated so confidentially.

False Claims Cases

A case involving harm to the United States Government is usually most properly filed as a False Claims Act matter. The federal False Claims Act allows an individual to sue on behalf of the United States and obtain an award between 15-30% of what the government recovers. Other than the First Amendment, this is arguably the first major whistleblower law in the United States and it is the law that has provided the foundation for how other whistleblower laws and provisions are enforced.

The False Claims Act includes anti-retaliation provisions, which allow individuals to sue if they become the subject of retaliation when they identify fraud against the government. False Claims Act case law, has created relatively stringent requirements to make a case successful. For example, fraud must be pled “with particularity” to survive a court challenge from the defendants.

Cases under this law are initially filed under a unique procedure. First, the case is filed under seal so that the government has an opportunity to investigate any allegations of fraud or misconduct.  Then the government can decide whether or not to “intervene” or take over the litigation.  If the government declines to take this action the whistleblower does have the right to proceed with the action.

Are There Any Reward Provisions For False Claims Whistleblowers?

The law works under the basic system of incentives to whistleblowers. Whistleblowers are entitled to be rewarded under the law for reporting fraud to the extent that their cases create a collection by the government. The reward provisions under the False Claims Act allow an individual to collect money when the government collects money either as a result of the settlement or as a result of the judgment in court. The reward is from 15-25% in the event that the case has been intervened and taken over by the United States Government, or the reward is from 25-30% if the government declines to intervene in the case and the plaintiff continues on and successfully obtains a judgment or settlement.

Under those circumstances, the share of the award is greater. The person prosecuting the case is prosecuting the case based on the idea that the amount of money the government is out is what is at issue. If the case goes all the way to trial and a person prevails, the defendants would be liable for three times the amount of damages caused to the government plus civil penalties.

When people look up the False Claims Act, they are going to see civil penalties of $5,000 and $10,000 written into the statute apply to the Defendants. However, if read carefully, the statute notes that the civil penalties are to be adjusted for inflation, and those civil penalties have now increased.

The civil penalty, the high-end of the civil penalty, is now over $20,000, which historically speaking, is still not that high because of the original Act back when it was first created in 1863, was $2,000. Most people will tell them that $2,000 in 1863 is worth a lot more today. In any event, the civil penalties are now over $20,000.

It is possible for a person to still recover a reward if they had a part in the defrauding. The provisions of the False Claims Act limits the awards to people who bring the information voluntarily to the government.

Do Whistleblowers Have Any Protections Against Retaliation in a False Claims Case?

The anti-retaliation provisions are sometimes called protections, but if one looks carefully at the law, they are not really protections. What they are is a way to sue. If the whistleblower is subject to retaliation from their employer for reporting when they believe someone is committing fraud, and they are able to seek compensation as a result.

They are entitled to sue if they are prevented in any way from reporting the fraud, or if they are retaliated against if they take efforts to try to prevent the fraud. This provision of the law is that there is one section, U.S.C. Section 3730(h), which is why the False Claims Act anti-retaliation claim is sometimes unknowingly referred to as an “H” claim.

The point is that a whistleblower may sue if they are the subject of such retaliation and assuming that they prevail, are entitled to two times back pay, reinstatement, and compensation for any special damages, so it is an important right for whistleblowers to consider.

It is a bit of a separate part of the law than the rest of the False Claims Act. It is actually possible to sue for retaliation without suing for the underlying fraud, and that has happened a few times. It has an entirely separate statute of limitations than the rest of the law.

A whistleblower can sue for retaliation and must sue within three years of the date the retaliation occurred, but if the suit is part of a False Claims Act filing, it is possible to put that in a consolidated action, and that statute of limitations would be tolled while the case is under seal. By contrast, the general statute of limitations for the underlying fraud is six years.

Even that gets very complicated very quickly because there is something called a right to propose which could potentially bring the statute of limitations as high as 10 years if the government had no reason to know about the fraud within the proceeding three years.

Reviewing a Claim

The whistleblower should be prepared for meeting the government about their case. The whistleblower should review all their filings prior to this meeting, and then, the process takes place. The whistleblower and their False Claims Act lawyer go into a room and meets with government attorneys and government investigators who are assigned to review the case. This meeting is usually not conducted the way someone tends to think of court actions with objections or rules of evidence or anything like that. Most of the time, such meetings are followed closely by somebody in the room taking notes, but not directly transcribed or recorded, so they have a feeling of being somewhat less formal in terms of what somebody entering into a legal proceeding might initially expect.

People are usually relatively friendly. The government tends to like whistleblowers, especially at the beginning of cases when they think there may be a very serious matter to investigate. Most government attorneys are very appreciative of the position the whistleblower is in at this point and, of course, the government and the whistleblower in False Claims Act cases are essentially on the same side most of the time.

Still, that should not take away from the seriousness of the case or the meeting. It is really an opportunity for the whistleblower to make their case with their counsel to the government as to the seriousness of the allegations they are presenting to the government.

It is an opportunity for the whistleblower to highlight areas where the government might be able to find more and additional evidence to support the case to the government.

Medicare and Medicaid

The most successful False Claims Act cases have involved Medicare and Medicaid fraud. There are at least two reasons for this; one is that Medicare and Medicaid and health care, in general, form a large portion of the government’s budget. The second reason is that the contracting relationship between the government and the people potentially committing fraud under Medicare and Medicaid is different than most government contract situations.

Under Medicare or Medicaid, the government pays for the service but does not directly receive the service. The government is the third party that pays for the beneficiary’s services and cannot see what is going on between the providers, doctors, and/or the patients. When claims are paid, the government assumes that the claims it received are valid.

As a result of this, the government is in a stronger position, when it pursues cases regarding Medicare fraud, they do not have prior knowledge of how the claim may be false. Medicare and Medicaid fraud has been an area of a successful prosecution under the False Claims Act.

Defense contracting is the number two area generating the most successful False Claims Act cases. Large government contracts are created to support the defense of the United States and fraud committed as a result has been the subject of False Claims Act cases. In fact, the False Claims Act was first developed during the Civil War when the Union Army was being defrauded in 1863.

Contact a False Claims Act Attorney

Whistleblowing often comes with risks, but it also comes with important rights. With the assistance of a determined False Claims Act lawyer, you can work to protect yourself, and ensure that your case is heard.