False Claims Act (“Qui Tam”)

False Claims Act

Each year, the government loses billions of dollars due to fraud and misconduct of companies and organizations. To combat this, the U.S. Congress enacted the False Claims Act (“FCA”). The FCA works with amazing efficiency by encouraging private citizens to police for fraud against the government by offering tremendous rewards.

The FCA was enacted by the U.S. Congress during the Civil War to respond to widespread fraud in the procurement of weapons and materials for the Union Army. The FCA contains qui tam (pronounced “key tam”), or whistleblower provisions. This is a mechanism which allows citizens with evidence of fraud against Federal government contracts and programs to sue, on behalf of the Federal government, in order to recover the stolen funds.

Common examples of False Claims Act violations include:

  • Fraudulent Healthcare Billing, e.g. Medicaid/Medicare
  • Kick Backs
  • Fraudulent Pharmaceutical Billing
  • Retention of Overpayments by the Government

Under the FCA, those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds are liable for three times the government’s damages plus civil penalties. The FCA explicitly excludes tax fraud. However, the Internal Revenue Service has its own whistleblower statute which provides for a substantial finder’s fee to informants.

In compensation for the risk and effort of filing a qui tam case, the citizen whistleblower or “relator” may be awarded a portion of the funds recovered, typically between 15% and 25%. Since the False Claims Act was amended, more than $35 billion has been recovered by the government as a result of qui tam lawsuits.

It is important to be the first one to file a False Claims Act case when fraud is discovered since the first whistleblower to do so has priority over later cases. There is also a statute of limitations, or expiration, which may be as short as 6 years. In recent years, whistleblower litigation has helped save billions of dollars and has paid out hundreds of millions of dollars in finder’s fees to the whistleblowers that bring the case!

If you or someone you know has reason to believe that employer or government misconduct is present you may have legal options for compensation. If you are aware of public entities, private companies and/or persons who have acquired federal monies through fraud, do not hesitate to contact the attorneys at Mashel Law, LLC. Mashel Law located in Marlboro, New Jersey, is dedicated exclusively to protecting the rights of employees.

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