False Claims Act and Qui Tam Lawsuits

In 2016 alone, the federal government recovered $4.7 billion in settlements under the false claims act.  From 2009 to 2016, the government has recovered $31.3 billion in settlements and verdicts under the false claims act.  The False Claims Act is a federal law that allows individuals to blow the whistle on government fraud.  Most cases involves government contractors overbilling the government, especially the Department of Defense, and Medicaid and Medicare fraud.  Typically, individuals or corporations that have overbilled, double-billed, or billed the federal government for services or products that were not provided do not commit just a little fraud, they do it on a massive scale, which leads to huge recoveries.  The False Claims Act makes those who commit fraud liable for three times the losses to the government.  The False Claims Act also has civil penalties ranging from $5,000 to $10,000 for each false claim submitted to the government – that’s for every single invoice or bill!

Financial Incentives for Whistleblowers

So, why would anyone decide to blow the whistle on government fraud?  First, fraud against the government is fraud against every single taxpayer in the country.  Second, the False Claims Act has provided huge financial incentives for people to say something if they see something.  The whistleblower will typically receive 15-30 percent of government’s recovery.  That can add up to quite a lot.  If the government recovers $10 million, the whistleblower can receive $1.5 million to $3 million, just for blowing the whistle.  The government’s recovery is often much higher.  For example, GlaxoSmithKline was forced to pay $3 billion for health care fraud in 2012.

Under the False Claims Act, a whistleblower actually brings a lawsuit on behalf of the United States of America.  This is called a “qui tam” lawsuit.  The whistleblower must file a lawsuit under seal to allow the Department of Justice and/or the State Attorney General to investigate the whistleblower claims.

The False Claims Act Protects the Whistleblower’s job

Many potential whistleblowers remain quiet for fear of losing their job or being harassed by their employer or co-workers.  The False Claims Act protects whistleblowers from harassment, discrimination, or discharge.  Any whistleblower who is harassed or discharged for blowing the whistle may be reinstated and receive twice the amount of wages lost.

Because the initial whistleblower lawsuit if filed under seal, it remains confidential.  This allows an employee to blow the whistle without the company knowing.  A claim for healthcare fraud UnitedHealth Group recently came to light, based on allegations made by a former employee over five years earlier.  See the New York Times report, Scheme Tied to UniteHealth Overbilled for Years, Suit Says.  The whistleblower in that case alleged fraud reaching into the billions, which could make the whistleblower a very rich man.  It pays to speak out and blow the whistle.

If you or someone you know is aware of any fraudulent billing against the United States Government or your state or local government, contact Klaproth Law for a free, confidential consultation.  Do not wait or delay because if one of your co-workers, blows the whistle first or if the fraud is made public, you will lose your whistleblower award under the False Claims Act.

You can submit a confidential tip here.