Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action. So any persons or entities with evidence of fraud against federal programs or contracts may file a Qui tam lawsuit. If the government or a private party has already filed a False Claims Act lawsuit based on the same evidence as you, you cannot bring a lawsuit. The more common types of relators are as follows:
- Employees: An employee who blows the whistle on his or her employer is one of the most common types of relators. Experience has shown that employees normally file qui tam actions against their employers as a last resort after repeated attempts to resolve the issues internally (very often through so-called internal “hotlines”) have met with negative results. An important provision of the 1986 amendment protects employees who file an action, or assists in furthering an action, against job retaliation by the employer.
- Former employees This is another common type of whistleblower who files a qui tam action. A former employee files a qui tam action based on his or her direct knowledge of fraud on the part of their former employer. In many cases, the former employee was terminated or quit under duress as a result of trying to blow the whistle internally.
- Competitors and Subcontractors Another type of relator is the competitor of the company being charged or an employee of the competitor who has direct knowledge of the fraud being committed. Also, companies or persons who subcontract with a government contractor have filed qui tam actions against the contractor.
- State and Local Governments The 1986 Amendments gave state and local governments the power to be relators in qui tam actions. Since then, there have been a number of qui tam actions filed by local and state governments against contractors and medical providers as a means of recovering state or local revenue lost as a result of the schemes.
- Federal Employees A much maligned group are former and current federal employees who file qui tam actions. The Act, as amended in 1986, does not exclude federal employees from being a relator. However, when a federal employee does file a qui tam action, it results in considerable controversy and numerous court challenges as to whether the employee, due to his or her responsibilities, are obligated to disclose the fraud. The courts have been mixed on whether a federal employee has standing under The Act and the Justice Department remains hostile toward this type of relator. Concerns have been raised as to whether a federal employee filing an action presents a type of conflict of interest.
- Other types of qui tam relators have included public interest groups, corporations and other private organizations. However, organizations as relators have raised questions as to whether they can meet the “public disclosure” provision of the law. Some courts have dismissed organizations as relators for not being able to meet that provision. The Act also allows a relator to file a qui tam action even if a “public disclosure” was made prior to the action being filed as long as the relator meets the “original source” test – the relator had “direct and independent knowledge” of the information on which the allegations were based and the relator “voluntarily provided the information to the government” prior to filing the action.
A qui tam action may be brought by virtually any person with first-hand knowledge of fraud or wrongdoing. If you know of fraud or dishonesty in a government contract or program, contact an experienced qui tam litigation attorney to pursue your claim.
Who Is Charged
According to the 1986 Amendment to the False Claims Act, almost any person, corporate organization or government entity can be charged as a defendant. The only exceptions are certain public officials such as members of Congress, judges and senior executive branch officials. Generally, government employees can also be charged.
Some of the more common defendants in qui tam actions are:
- Government Contractors and Subcontractors The most common defendant in qui tam actions. Subcontractors can be charged if they cause a false claim to be presented to the Government through a contractor.
- Medical Providers Another common defendant in qui tam actions involving Medicare/Medicaid fraud. Includes doctors, hospitals, HMOs, and clinics.
- Private Universities Private universities have been charged as defendants in qui tam actions that involves their handling of federal grants and research and development money.
- State and Local Government Agencies and Officials Because they are recipients of large amounts of federal money, state and local entities can be defendants in qui tam actions. This also includes state run universities and colleges.
In general, any organization or person who uses federal money can be charged as a defendant in a qui tam action.
The size of the relator’s share of the award depends on several factors:
- If the Government joins, and successfully prosecutes the case, and the relator was not involved in the wrongdoing, the relator can receive between 15 and 25 percent depending on the extent of the relator’s contribution to the case.
- If the Government does not join and the relator successfully prosecutes the case, the relator will receive between 25 and 30 percent of the proceeds.
- If it is determined the relator was involved in the wrongdoing, the court can reduce the relator’s share at its discretion depending on the circumstances of the relator’s involvement. The court will dismiss a relator out of an action and deny receipt of any share of an award if the relator is convicted of criminal conduct arising from the wrong doing alleged in the lawsuit.
In addition to receiving a percentage of the award, the False Claims Act also provides that the relator, if successful, will be reimbursed for expenses incurred, including attorneys fees and costs.
While the statute is an effective tool against fraud, it is limited in scope. For example, the following are not actionable under the False Claims Act:
- Certain actions against armed forces members, members of Congress, members of the judiciary, or senior executive branch officials.
- Claims, records or statements made under the Internal Revenue Code of 1986.
- Suits based upon allegations or transactions that are already the subject of a civil suit or administrative money penalty proceeding to which the government is already a party.
- Cases based upon allegations or transactions that have been publicly disclosed unless the relator has direct and independent knowledge of those allegations or transactions, and has provided the information to the government prior to filing suit.
- Mismanagement by government contractors that does not rise to the level of knowingly made false statements to the government for purposes of getting a claim paid.
- The government’s own ineptitude or waste. Only those who have made false claims to the government are proper defendants under the statute. If you are seeking redress for wrongful termination or employment discrimination, or are suspicious about unusual billing practices, ask your lawyer about the powerful remedies offered by the False Claims Act.
Our firm is only investigating claims in which a business entity, such as a company or medical practice, is submitting false claims to a governmental entity in excess of $500,000. We do not handle cases involving individuals receiving government benefits under false pretenses. (For example, we do not handle claims in which a person falsely claims disability in order to receive government benefits. ) For these claims, you should contact the appropriate governmental agency directly, such as a state medicare-fraud hot line, and report the fraud. Regarding tax fraud, we are only handling cases in which the underpayment of taxes exceeds $2 Million, and the income of the person committing tax fraud exceeds $200,000 per year.