False Claims Act attorneys represent clients who bring whistleblower claims under the False Claims Act (FCA. The FCA is a federal law that has been in place since the Civil War era which empowers whistleblowers, also known as “qui tam relators,” to bring forward information about fraudulent claims against the government.
False Claim Act whistleblowers play a crucial role in uncovering fraud against the federal government and protecting taxpayer resources – a staggering $70+ billion has been recovered under the FCA since 1986 when Congress strengthened the law.
But the process of becoming a whistleblower is not a simple one—it requires courage, knowledge, and navigating a complex legal framework. Legal assistance plays a crucial role in the process, from understanding the complex legal framework to ensuring the whistleblower’s rights are protected.
In this article, we’ll explain what the federal False Claims Act is, the process of becoming a whistleblower, and why hiring an experienced False Claims Act attorneys is vital for achieving the best possible outcome.
Understanding the False Claims Act
To fully comprehend the role and implications of becoming a whistleblower, it is helpful to understand some basics about the False Claims Act. The FCA is a robust piece of legislation designed to combat fraudulent activities against the federal government, while many states have their own versions focused on fraudulent activities against state governments.
A Brief History and Purpose of the FCA
The FCA, which is sometimes referred to as “Lincoln’s Law,” was enacted during the Civil War in response to fraud against the government by defense contractors. Despite being over a century old, the FCA remains a vital tool in protecting the financial interests of the government and taxpayers. The DOJ recovered more than $2.2 billion in settlements and judgments from FCA cases in the fiscal year 2022 alone.
The primary purpose of the FCA is to hold accountable individuals and companies who defraud government programs. The law covers a broad range of fraud, including healthcare fraud, defense contractor fraud, and customs and tariff fraud, among others.
Types of Fraud Covered by the FCA
The FCA covers a broad range of fraudulent activities. Here are some common types of fraud that fall under the Act:
- Healthcare Fraud: This could include billing for medically unnecessary services or for services not provided, upcoding, and pharmaceutical companies offering kickbacks to doctors for promoting their products, all in violation of Medicare, Medicaid, and/or Tricare regulations.
- Defense Contractor Fraud: This could involve bid-rigging, price fixing, misrepresenting company qualifications, inflating the cost of goods or services, supplying substandard goods or services, and improperly substituting cheaper or foreign-made goods and materials.
- Customs and Tariff Fraud: This could include the undervaluing of goods, misclassification of goods, misrepresenting the country of origin, or other improper activities to avoid paying tariffs and duties.
Role of Whistleblowers under the FCA
Whistleblowers, or qui tam relators, play a crucial role in advancing the False Claims Act’s core purpose of uncovering fraud against the federal government and protecting taxpayer resources.
In an FCA context, a qui tam action allows a private citizen (the whistleblower) to file a lawsuit on behalf of the U.S. government against the party allegedly committing fraud. (The term “qui tam” comes from a longer Latin phrase meaning “[he] who sues in this matter for the king as well as for himself.”)
Whistleblowers are often employees or insiders who discover fraudulent activities within their organization. Under the FCA’s qui tam provision, these individuals can file a lawsuit on behalf of the government and potentially share in the recovery.
In 2022, whistleblowers were awarded over $488 million from FCA recoveries.
Essential Elements of a Whistleblower Case
There are certain essential elements to any whistleblower case under the FCA.
It’s crucial to handle your potential whistleblower case with care and discretion, confiding only in a qualified whistleblower attorney. Premature disclosure of information can hinder the chances of a successful enforcement action and recovering a whistleblower award.
Original Source Requirement
To establish a viable qui tam lawsuit under the False Claims Act, you, as the whistleblower, must be the original source of information pertaining to deliberate fraud that significantly impacts the government’s payment decisions.
According to the False Claims Act, an “original source” refers to an individual who either:
- Voluntarily disclosed the information to the government before any public disclosure, upon which the allegations or transactions in a claim are based.
- Possesses knowledge independent of and materially adds to the publicly disclosed allegations or transactions, having provided this information to the government before filing an action.
Therefore, it is vital to consult with a seasoned whistleblower attorney as soon as possible and report your information promptly. Additionally, maintain strict confidentiality regarding your potential case, sharing details only with your attorney.
Materiality of the Information
For a successful whistleblower case, the information you possess must demonstrate that the fraud in question was “material” to the government’s payment decision.
It’s important to note that not all unethical or immoral behavior necessarily qualifies as the basis for a fraud claim. The misconduct must have a significant impact on the government’s interests.
Corroboration of Your Case
When pleading fraud, you must provide specific and detailed evidence, avoiding general conclusions. This evidence can take various forms, such as:
- Descriptions of situations observed or overheard conversations.
- Documentation, including but not limited to written communications (such as emails and text messages), spreadsheets, meeting minutes, company regulations, and any other relevant records.
The Process of Becoming a Whistleblower
For potential whistleblowers, a question that often arises is, “How do I become a whistleblower?”
Steps to File a Whistleblower Lawsuit under the False Claims Act
- Consult with an Experienced Whistleblower Attorney: Before taking any action, it’s crucial to consult with an attorney with substantial False Claims Act experience. They can help evaluate the strength of your case, guide you through the process, and protect your interests.
- Gather Evidence: You need concrete evidence to support your claims. This may include internal communications, financial records, or other documentation of the fraudulent activity. Your whistleblower attorney can advise on how to approach this.
- File a Qui Tam Lawsuit: Your attorney will prepare and file a qui tam complaint under seal. This means the lawsuit is kept confidential while the government investigates the claims.
- Government Intervention: The government will decide whether to intervene in the lawsuit. Even if they choose not to, you can still proceed with the lawsuit on the government’s behalf.
Protections and Rewards for Whistleblowers
Whistleblowers under the FCA are granted certain protections and can potentially receive substantial rewards.
- Protections: The FCA contains provisions protecting whistleblowers from retaliation, such as being fired, demoted, threatened, or harassed due to their involvement in an FCA action.
- Rewards: If a False Claims Act case results in a recovery through a settlement or favorable judgment, the whistleblower may receive a portion of the recovery. This typically ranges from 15 to 30 percent of the total recovery.
Remember, every whistleblower’s journey is unique, and the path to justice can be complex. That’s why having the right legal representation is vital to navigating this process effectively and safeguarding your rights and interests.
The Role of a Law Firm in Protecting Whistleblowers
Whistleblowers play an indispensable role in maintaining transparency and integrity within industries. However, the journey to becoming a whistleblower on fraudulent practices can be overwhelming and complex. This is where expert legal representation from an experienced False Claims Act attorney comes in.
Why Legal Representation is Important for Whistleblowers
Becoming a whistleblower and navigating the legal framework surrounding the False Claims Act can be complex. There are a number of ways that an experienced False Claims Act lawyer can provide crucial help to whistleblowers, including:
- Understanding the complex FCA litigation process – Qui tam actions are unlike other lawsuits and have various legal requirements. An experienced whistleblower attorney will know how to navigate these specific legal requirements, helping to navigate the complex framework involved.
- Preparing a strong qui tam lawsuit – The FCA requires a qui tam relator to provide “written disclosure of substantially all material evidence and information” they possess. False Claims Act attorneys provide crucial assistance in synthesizing all the relevant information and filing it in the initial complaint.
- Assisting government investigations — If the government decides to open an investigation, the whistleblower may need to provide further information and insights to assist the False Claims Act investigation. A False Claims Act lawyer can help build the strongest possible case.
- Protection against retaliation – False Claims Act attorneys are familiar with the FCA’s anti-retaliation provisions and work to protect whistleblowers from any adverse actions taken by their employers in response to the whistleblower’s decision to report fraud. They can also seek to preserve the whistleblower’s anonymity for as long as possible during the process.
- Advocating for an appropriate whistleblower award – A False Claim Act attorney can negotiate with the government to secure a fair whistleblower award that appropriately compensates the whistleblower’s efforts in helping to expose fraud.
Whistleblower firms with substantial experience in False Claims Act lawsuits can help guide whistleblowers through these challenges and more, ensuring they’re well-equipped to navigate this journey.
Experienced False Claims Act attorneys have a nuanced understanding of the relevant legal framework, years of experience navigating complex legal scenarios, and a proven track record of successful case outcomes.
Case Study: Successful Whistleblower Cases
Whistleblowers, with their courage and commitment to justice, often help expose significant instances of fraud. Backed by experienced law firms, their actions have led to significant settlements, ensuring the government recovers funds lost to fraudulent practices. Let’s examine two such successful whistleblower cases.
Healthcare fraud cases represent the majority of False Claims Act claims. Of the $2.2 billion recovered through False Claims Act settlements and judgments in 2022, over $1.7 billion of that total was related to False Claims Act matters involving the healthcare industry.
At Jeff Newman Law, for example, attorney Jeff Newman filed a qui tam lawsuit that led to a $125 million settlement to resolve allegations that RehabCare, a nursing home therapy provider, engaged in various schemes to bill for therapy that was not necessary and reasonable which caused its nursing home customers to submit fraudulent claims to Medicare.
The whistleblower award was nearly $24 million for the qui tam relators’ efforts in exposing the fraudulent activities.
Customs and Tariff Fraud
In 2022, Jeff Newman Law represented a Hong Kong national in a False Claims Act claim against a California-based importer, RGE Motor Direct. RGE allegedly evaded tariffs on furniture and other goods it imported from China after the U.S. imposed 25% tariffs on many Chinese goods.
RGE’s scheme involved submitting false invoices that shifted much of the price of the imported merchandise to fraudulent invoices for “testing” or “certification” of the merchandise. This led to RGE underpaying customs duties owed on its merchandise. In November 2022, RGE agreed to pay $3.25 million to resolve the case and the whistleblower received an $893,750 reward.
Government Contractor Fraud
The U.S. government spends over $700 million annually on national defense and hundreds of billions more on other federal programs. Unfortunately, some government contractors submit false claims or find other ways to engage in government procurement fraud.
For example, in 2018, Japanese fiber manufacturer Toyobo Co. Ltd. paid $66 million to resolve a False Claims Act claim alleging that it sold defective Zylon fiber used in bulletproof vests that the federal government purchased for federal, state, local, and tribal law enforcement agencies.
Contact a healthcare fraud whistleblower attorney today
Contact us for a free confidential assessment of whether you might have a potential False Claims Act lawsuit that could result in a whistleblower award:
- Contact us for a free confidential consultation
- Call us at (617) 823-3217