Private persons can file a qui tam lawsuit for violations of the FCA on behalf of the federal Government. Whistleblowers are entitled to 15-30% of the proceeds in a successful action and are protected against retaliation.
Whistleblower 101: The False Claims Act (FCA)
For cases that involve fraud against the United States Government, complaints are sometimes filed under the False Claims Act.
Understanding the False Claims Act can be tricky, but it is important for anyone who is considering blowing the whistle on corporate fraud to know the basics.
What is The False Claims Act?
The False Claims Act was first enacted by Congress during the Civil War in an effort to prevent companies from selling faulty supplies to the Union Army.
The False Claims Act was drastically amended several times in order to increase its effectiveness of fighting fraud against the federal government.
Today it is one of the most rewarding and protective whistleblower laws in the country, allowing individuals to report fraud that occurs against the United States Government and against state governments under state FCAs.
4 Violations of The FCA
Before blowing the whistle, it is important to understand what qualifies as a violation under the False Claims Act. Here are four of these violations:
- Requesting payment from the federal government for fraudulent claims
- The use of falsified records to receive payment from the federal government
- Colluding with one or more individuals to receive payment from the federal government for a fraudulent claim
- Failing to pay a financial obligation to the government, such as custom tariffs
The FCA provides that any person who knowingly submits false claims, or causes another to submit a false claim, to the Government, is liable for a civil penalty between $5,500-$11,00, plus three times the amount of damages sustained by the government.
How To File Under The False Claims Act
Due to the statute of limitations, it is important to file claims under the False Claims Act in a timely manner. To begin this process, you must hire an attorney.
Your attorney will then review all of the relevant and important information needed to organize and file your claim. At the time that the claim is filed, all evidence and relevant material will also need to be provided.
The False Claims Act is a “fist to file” statute. In the event that a False Claims Act lawsuit has already been filed using the same evidence that you plan to offer, you will not be able to file a claim or receive a reward.
Whistleblower Protection and Incentive
Under the False Claims Act, whistleblowers who experience workplace retaliation are eligible to receive varying levels of relief. According to the FCA, this relief may come in the form of:
- Double back-pay
- “Special damages” such as payment for emotional damages
- Future lost earnings
- Compensation for legal fees and case costs
Monetary Incentive of The False Claims Act
In order to be eligible to receive a monetary award, the information and assistance provided must result in a favorable outcome of the lawsuit. When this is the case, the whistleblower is entitled to between 15%-30% of the amount recovered by the government, plus an amount for legal fees and other expenses of the case.
Begin Your False Claim Act Lawsuit Today
If you have knowledge of fraud against the federal government, it is important to report it promptly. The FCA is a “first to file” statute, meaning that when a private person brings an FCA action, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). In other words, only the whistleblower who first reports the fraud to the government is entitled to a whistleblower reward.
For common types of qui tam cases, click here.