Qui Tam (Whistleblower)
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Every year, the United States government pays billions of dollars in government contracts awarded to private parties to provide national defense, road and bridge construction and other goods and services. Billions more dollars are paid to provide health care coverage under Medicare and Medicaid. Unfortunately, many of these transactions are fraudulent and harm the United States and its taxpayers by causing them to overpay for services or pay for goods and services that were never provided.
In an effort to combat such fraud, the federal government empowers and relies upon private individuals to file lawsuits on behalf of the United States to recover taxpayer funds that have been wrongfully paid as a result of fraud.
The United States Department of Justice recently announced that it obtained nearly $6 billion in settlements and judgments from False Claims Act cases during the fiscal year ending in September 2014. Of this amount, nearly $3 billion related to lawsuits filed under the qui tam provisions of the federal False Claims Act. During this time, the government also paid a total of $435 million to the private parties who blew the whistle, reporting fraud against the government by filing a qui tam lawsuit.
What is a Qui Tam Lawsuit?
The term “qui tam” is an abbreviation of the Latin phrase meaning, “He who sues on behalf of the King, as well as for himself.”
Under the qui tam provisions of the federal False Claims Act, any person with independent knowledge of fraud against the government may file a lawsuit seeking to recover taxpayer funds on behalf of the United States. Many states, including New Jersey and New York, have also enacted their own False Claims Acts, modeled after the federal False Claims Act.
Filing a Qui Tam Lawsuit
The person filing a qui tam lawsuit, or “blowing the whistle” on the party or parties defrauding the government, is referred to as a “relator” and must be represented by a lawyer. To initiate the lawsuit, the relator’s counsel files a qui tam complaint, under seal, in federal court. A copy of the complaint, together with a disclosure statement, must also be provided to the Department of Justice and local Assistant United States Attorney.
Once filed, the qui tam complaint remains under seal for at least 60 days, during which time the Department of Justice investigates the allegations and decides whether it wishes to intervene in the lawsuit. It is not unusual for the Department to seek a number of extensions of the seal, and in many instances, the case may remain under seal and under investigation by the government for several years.
While the case remains under seal, the identity of the relator is kept secret. The False Claims Act also provides protection to the relator from retaliation for blowing the whistle and reporting fraud against the government.
Damages under the Federal False Claims Act
If the government prevails in the action, the party or parties responsible for the fraud may be ordered to pay substantial financial damages. This may include an award of treble damages (or three times the amount of money the government was defrauded), plus $5,500 to $11,000 for each false claim submitted. In the event the government intervenes in the qui tam lawsuit and takes over the prosecution of the case, the relator’s share may be between 15% and 25% of the damages award. The qui tam relator who proceeds without government intervention may be awarded up to 30% of the damages award as the relator’s share for their part in the outcome. There are many other factors that are also considered in determining the exact amount of the relator’s share of an award.
Examples of Government Fraud and Qui Tam Lawsuits
Under the federal False Claims Act, a defendant, or wrongdoer, may be liable for a number of acts of government fraud, including the following:
Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to a government agency
Knowingly making, using, or causing to be made or used, a false record or statement of material fact to support a fraudulent scheme
Possessing property or money used, or to be used, by the government and knowingly delivering, or causing to be delivered, less than all of that property or money
Making or delivering a document certifying receipt of property used, or to be used, by the government, and, with intent to defraud the government, making or delivering the receipt without knowledge that the information on the receipt is true
Buying, or receiving as a pledge of an obligation of a debt, public property of the government or member of the Armed Forces, from someone who lawfully may not sell or pledge the property
Although there are many circumstances which may give rise to legitimate qui tam lawsuits, in recent years, litigation has largely focused on the following areas:
Healthcare Fraud, including overbilling Medicare, Medicaid and TRICARE, a health program for uniformed service members and their families
Violations of the Anti-Kickback Statute and Stark Law, which prohibit payment for certain health care referrals
Pharmaceutical Fraud, including a pharmaceutical manufacturer’s promotion of its drugs for uses other than those approved by the Food and Drug Administration (FDA)
Defense and Government Contractor Fraud, including charging the government for substandard goods and component parts under military contracts
Housing and Mortgage Fraud
Banking, Securities and other Financial Fraud
IRS and Tax Fraud
Although the statute of limitations for filing a qui tam complaint under the federal False Claims Act is typically six years from the date of the alleged fraud, a relator may only recover a share of any damages award if they were the “first to file” a complaint about the alleged fraudulent scheme.
A qui tam relator must also be an original source of the information set forth in the complaint. The basis for a qui tam complaint may not be publicly available information from another suit in which the government is already a party.
Whether to file a qui tam lawsuit involves many other important considerations. Qui Tam (Whistleblower) Lawyers in Locks Law Firm’s Pennsylvania, New Jersey and New York offices are available for a free, confidential consultation to discuss your potential claim.
Contact a Locks Law Firm Qui Tam (Whistleblower) Lawyer
To schedule a free, confidential consultation and case evaluation with a Qui Tam (Whistleblower) Lawyer, contact the Pennsylvania, New Jersey or New York Offices of the Locks Law Firm today.Do I have a case? Free Case Evaluation