Federal False Claims Act and Whistleblower Protection Act

The Cartwright Law Firm is currently evaluating potential claims of individuals who have direct knowledge of various types of fraud being committed against the government under the provisions of the federal False Claims Act. If you have direct knowledge of defense contractor fraud, the provision of false statements regarding a government contract, Medicare/Medicaid fraud, nursing home fraud or procurement fraud with regard to a government contract, please contact The Cartwright Law Firm immediately to discuss your rights and the possibility of filing a lawsuit to inform the government of the fraud being committed.

The United States government spends billions of dollars every year on contracts entered into with private citizens and corporations for the provision of products and services. While the majority of such private citizens and corporations are honest and fair dealing, to the detriment of the federal government and the taxpayer, a significant number of people engage in fraud. Examples of fraudulent dealings include over billing the government, charging for services that were never provided, charging for goods that were never delivered, or for disregarding contractual obligations. Individuals and/or businesses that defraud the government damage the integrity of the government contracting process.

Some of the most common types of fraud committed against the government include:

• Defense contractor fraud (over-billing for products or billing for substandard products from subcontractors)
• False Statements (can include statements regarding contract compliance, labor issues, environmental issues, anti-kickback compliance or competitive bidding compliance)
• Medicaid/Medicare fraud (billing for services that were not actually provided or over-billing for services by hospitals, physicians, nursing homes, pharmacies, home health care agencies or laboratories)
• Nursing Home fraud (billing for services that were not necessary or appropriate to patient care; billing for services that were not actually provided, over-billing for services or supplies)
• Procurement fraud (false billing and delivering substandard products or services)

In an attempt to minimize and/or to prevent fraudulent dealings from taking place and to encourage the reporting of fraud that has already taken place, the government enacted the federal False Claims Act. Because most often the only individuals with knowledge of fraud taking place (other than the fraudulent actor him or herself) are employees of the company involved, the False Claims Act provides both an incentive for reporting fraud as well as protection to the individual who makes the report.

The False Claims Act provides that the person who reports fraud against the government is entitled to a percentage of the money the government recovers from the wrongdoer. The plaintiff’s share may be up to thirty percent (30%) of the amount recovered from the defendant.

The Whistleblower Protection Act provides protection for the individual who reports the fraud against the government. Many individuals who are aware that their employers are committing fraud are hesitant to come forward and report the fraud for fear of possible retaliation by the employer. The Whistleblower Protection Act contains provisions that prohibit employers from engaging in retaliatory actions against an employee such as harassment, demotion or wrongful termination. In addition, the law requires that information about fraud against the government be filed “under seal,” which means that identity of the person revealing the fraudulent action is kept secret as long as the case remains under seal.

The process by which an individual may report fraudulent business dealings against the government is as follows. First, there is a special name for this type of lawsuit. It is called a “Qui Tam” lawsuit. The term “qui tam” is derived from a Latin phrase, “Qui tam pro domino rege quam pro se ipso,” which referred to a person “who sues on behalf of the king, as well as for himself.” Thus, an individual who brings a qui tam lawsuit is doing so on behalf of and for the benefit of the government, as well as for him or herself.

The individual or employee who discovers fraud against the government and who reports such fraud by filing a qui tam lawsuit is called the “relator.” Generally speaking, any individual who has knowledge of fraud or dishonesty against the government may file a qui tam action if that individual has direct knowledge of the wrongdoing. In addition, the individual cannot bring a qui tam action for fraud that is already a matter of public knowledge. For example, a fraudulent matter of public knowledge would be one in which the fraud was already the subject of a prior court action or the subject of testimony before an administrative agency or legislative body. However, even given the above limitation, there may be exceptions if the individual’s knowledge of wrongdoing was independent of the public’s knowledge.

To originate a qui tam action, the individual’s attorney would file a complaint with the federal District Court setting forth the details of the wrongdoing or fraud that forms the basis of the complaint. A copy of the complaint is also served on (provided to) the United States Attorney General and the Department of Justice in Washington, D.C. As mentioned above, the complaint is filed and served “under seal” to protect the identity of the individual. The defendant in a qui tam action (the wrongdoer) may be found liable for three times the amount of monetary damages sustained by the government, in addition to a penalty, under the False Claims Act.

Contact Us today!