United States taxpayers lose money every day because of fraud against the government. When the federal government is defrauded and pays out more money than it should have paid, all taxpayers must pay more.
Fortunately, there is a law designed to help the government stop fraud, the False Claims Act. Congress intended the False Claims Act to encourage private citizens to file cases in the name of the United States to recover damages when false and fraudulent claims are submitted to the government.
Sometimes called “whistleblower” or qui tam lawsuits, these cases under the False Claims Act provide a way for private citizens to share in the recovery of damages recovered. The term “qui tam” is an short for an old Latin phrase, which originally meant “who pursues the action on our Lord the King’s behalf as well as his own.”
The False Claims Act was enacted in 1863, at President Abraham Lincoln’s request. The law’s purpose was to “aid in the effort to root out fraud against the government . . . [and] to encourage private individuals who are aware of fraud being perpetrated against the Government to bring such information forward.”
Our courts have praised this “whistleblower” law: “one of the least expensive and most effective means of preventing frauds on the treasury is to make the perpetrators of them liable to actions by private persons . . . .”
By 1986, Congress realized that the False Claims Act could be an even better tool to help the government prevent fraud. As a result, in 1986 Congress amended the False Claim Act to increase the damages and penalties that can be recovered, to add protection against retaliation for whistleblowers, and to make other changes that encouraged greater use of this law to combat fraud against the government.
“Congress wanted to reward private individuals who take significant personal risks to bring wrongdoing to light, to break conspiracies of silence among employees of malfeasors, and to encourage whistleblowing and disclosure of fraud.”
The 1986 changes to the law created more incentives for private citizens to “blow the whistle” against fraudulent conduct. Congress increased the statutory penalties that may be imposed against those committing fraud against the government to a minimum of $5,000.00 and a maximum of $10,000.00 for each violation, plus three times the government’s actual damages (“treble damages”).
The 1986 amendments to the False Claims Act also lowered the standard of proof required and made defendants liable for acting with “deliberate ignorance” or “reckless disregard” of the truth.
Congress also lengthened the statute of limitations from six years to as much as ten years. 31 U.S.C. § 3731(b)(1)-(2). The 1986 amendments made other changes as well. Especially since the 1986 amendments, whistleblower or qui tam lawsuits now are an effective tool for recovering damages caused by fraud against the government. Both the government and the private citizen are rewarded when such recoveries are made. If the government decides to pursue such a case that has been filed by a private citizen, the private citizen can obtain a recovery of between 15% and 25% of the amount recovered, plus reasonable expenses and attorney’s fees. If the government does not intervene in the case, the private citizen or qui tam plaintiff may recover between 25% to 30% of the damages recovered, plus fees and expenses. (For a summary of significant U.S. Supreme Court cases in this area, click here.)
Criminal and Civil Experience in Protecting Whistleblowers
Sometimes a “whistleblower” is afraid to come forward because of fear of what might happen to him or her in any criminal prosecution. Our firm offers unique criminal and civil experience in protecting our clients’ interests. Our attorneys have prosecuted and defended criminal cases, as well as civil False Claims Act cases, and thus we can offer our clients both areas of expertise.
Our ability to represent qui tam whistleblowers is greater because most of our firm’s partners are former federal prosecutors. Our attorneys have prosecuted federal criminal cases involving fraud, including high-profile cases. Our attorneys also have represented clients in our white collar criminal defense practice as well. Our qui tam or whistleblower clients benefit from all of that experience.
Our lawyers use their unique criminal and civil experience in advising and representing “whistleblowers.” Our goals are to protect our clients from any criminal liability, and also to pursue our clients’ claims to recover damages in qui tam or whistleblower lawsuits. Because of that experience, our clients can help stop dangerous and costly fraud against the government.