The False Claims Act—What Are “Qui Tam” Cases?

The False Claims Act (FCA) is the nation’s major “whistleblower” law addressing fraud against the government. We have written a detailed article explaining the Act for other lawyers, which you are welcome to print or save by clicking here.

When we began working with the False Claims Act in 1988, most cases involved fraud in the defense industry. Today, most FCA cases deal with healthcare fraud, but many involve other types of fraud against the government. The major False Claims Act areas are:

• Healthcare fraud (including Medicare and Medicaid fraud)
• Defense contractor fraud
• Financial industry fraud
• Other fraud (a wide variety of cases)

Here are some essentials about the False Claims Act:

• The Act is the federal government’s primary tool to combat fraud affecting taxpayer funds. To protect state funds, at least 26 states now have a state version of the FCA.
• Private citizens who use this law to expose fraud can receive 15-30% of the money recovered by the government.
• Brief history: Congress passed the Act during the Civil War to deal with war profiteering, but weakened the law during World War II and made it ineffective.
• In 1986, Congress created the basic version of the False Claims Act that we have today. Congress increased the rewards to whistleblowers (or “relators”) who use this law to recover damages and penalties for fraud against the government.
• Money damages can be large, depending on the case. In addition, defendants can be liable for three times the amount of damages they cause (“treble damages”).
• The Act also authorizes penalties of $5,500 to $11,000 for each false or fraudulent claim by a defendant.
• This law has very unusual procedures that are different from other lawsuits, and that are unfamiliar to many lawyers. For example, private citizen whistleblowers or “relators” file these cases on the government’s behalf. The cases remain confidential under seal for some time while the government investigates and decides whether to join in the case. These cases by private citizens are known as “qui tam” cases.
• The Act also protects individuals from retaliation for conduct protected under the statute.
• Congress strengthened the FCA with major amendments in 2009 and 2010.
• Since 1986, FCA recoveries have increased dramatically. In 1987, the government recovered just $86 million under the Act. Now, it usually recovers well over $1 billion each year in FCA cases. In 2010, of the $3 billion recovered, $2.3 billion was recovered in qui tam whistleblower cases.

More than 20 years ago, our lawyers began handling FCA cases. We have both defended and prosecuted cases under the Act. We now prosecute FCA cases by representing private citizen whistleblowers who help stop fraud against the government, and receive a share of the government’s recovery. As former prosecutors, we work hand in hand with government counsel in pursuing these cases.

Legislators asked our help in drafting a state version of the False Claims Act for Georgia, and we testified at each legislative hearing to explain the False Claims Act.

We founded the bi-annual Whistleblower Law Symposium that attracts a national faculty to discuss False Claims Act and other whistleblower law developments. We also are regularly asked to speak at seminars to update other lawyers on developments in False Claims Act cases.

Our whistleblowerlawyerblog.com regularly provides updates on the FCA, as well as the other major programs that provide our clients a share of the goverrnment’s recovery: the IRS Whistleblower Program, and the SEC and CFTC Whistleblower Programs. For a free consultation about a potential case, please call us at 800-228-9159, or click here to send us an email.