The False Claims Act allows private citizens (known in this context as “relators” or “whistleblowers”) who have knowledge of a fraud perpetrated on the federal government to file a lawsuit against the wrongdoer on behalf of the government. The statute, codified at 31 U.S.C. § 3729, was originally enacted in 1863 in response to defense contractor fraud that occurred during the American Civil War. These lawsuits are also known as qui tam cases, which is Latin for “who sues on behalf of the King as well as for himself.”
A relator who successfully prosecutes a qui tam action can recover, on behalf of the government, treble damages and penalties against the wrongdoers who falsely claim money from the United States (or who knowingly fail to pay money owed to the United States). Significantly, private citizens who successfully bring a False Claims Act may receive a portion of the government’s recovery. The amount of the payment to the whistleblower ranges from 15% to 30% of the government’s recovery. The actual amount payable to a relator in a given case depends on several factors, principally whether the government decides to formally join in the lawsuit. The size of these cases can be significant; according to the Department of Justice, the government recovered over $2.68 billion under the False Claims Act in 2023.
What are the typical situations where a False Claims Act claim may arise?
In general, the False Claims Act is a broad statute that could apply to any of the myriad situations involving the government and a monetary transaction, a request for payment or reimbursement, or a contract with a third party. Examples of where such cases can arise are in the healthcare industry (e.g. billing Medicare for services not provided, or fraudulently changing the reimbursement codes); in the military branches (e.g. overbilling for manufacturing supplies and equipment); and in the context of pandemic relief programs. There are also agency specific claims that can be brought in conjunction with the IRS (for tax fraud) and the SEC (for exposing a Ponzi scheme, insider trading, or other corporate fraud).
If you believe you have information that may be relevant to a potential whistleblower action, please contact the lawyers at Shub & Johns today for a free and confidential consultation. Our firm handles such matters on a contingency fee basis, so there is no obligation to us unless and until there is a successful recovery.
