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The False Claims Act qui tam provision is one of the strongest whistleblower protection laws in the United States. However, it has many complicated components and requirements, which can harm any person that pursues such a claim without counsel. If, after reviewing this section, you believe that you may have an action arising under the False Claims Act and need an attorney, please contact Insider Fraud Lawyers.
Q: What is the False Claims Act?
The False Claims Act (31 U.S.C. Sections 3729 through 3733) is the oldest qui tam law, originally enacted in 1863 but later amended in 1943 and 1986. It has been further strengthened by recent amendments in 2009 and 2009.
Since its modernization in 1986, it has proven to be the most effective antifraud law in the United States.
Q: What does “qui tam” mean?
Qui tam literally means “in the name of the king.”
Under the False Claims Act, qui tam allows persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States Government.
In qui tam actions, the government has the right to intervene and join the action. If the government declines, the private plaintiff may proceed on his or her own. Some states have passed similar laws concerning fraud in state government contracts.
Q: What actions are considered violations under the False Claims Act?
Some actions that would be considered violations of the False Claims Act are as follows:
- Charging the government for more than was provided;
- Fraudulently seeking a government contract;
- Submitting a false application for a government loan;
- Submitting a fraudulent application for a grant of government funds;
- Demanding payment for goods or services that do not conform to contractual or regulatory requirements;
- Requesting payment for goods or services that are defective or of lesser quality than were contracted for;
- Submitting a claim that falsely certifies that the defendant has complied with a law, contract term, or regulation;
- Attempting to pay the government less than is owed.
Q: Who can file a qui tam action?
Any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit.
However, if the government or a private party has already filed a False Claims Act lawsuit based on the same evidence, you cannot bring a lawsuit.
Q: Who is a “relator” under the False Claims Act?
When the False Claims Act was signed into law by President Abraham Lincoln during the Civil War, the term “whistleblower” was not in use.
The term “relator” is the term used in the statute to identify the original source of the frauds against the government. Consequently, in modern whistleblower reward laws, the term “relator” is often used by the Courts and parties to signify a whistleblower.
Q: Where should a qui tam action be filed?
A qui tam action must be confidentially filed under seal in federal district court in accordance with the Federal Rules of Civil Procedure. A copy of the complaint, with a written disclosure statement of substantially all material evidence and information in the plaintiff’s possession, must be confidentially served on the US Attorney General and the US Attorney for the district in which the complaint is brought.
An action under the False Claims Act must be filed, in camera and under seal. The complaint and its contents must be kept confidential until the seal is lifted. The complaint is not served on the defendant. If the plaintiff violates the provisions of the seal, his or her complaint could be dismissed.
Q: What are the civil penalties under the False Claims Act?
Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim.
A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or settlement.
To be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough.
You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.
Q: What are the statutes of limitations for filing a qui tam lawsuit?
Under the False Claims Act, an action must be filed within the later of the following two time periods: Six years from the date of the violation of the Act; or Three years after the government knows or should have known about the violation, but in no event longer than ten years after the violation of the Act. (One Circuit Court has interpreted the second provision as requiring that the action be filed no later than three years after the qui tam plaintiff rather than when the government knows, or should have known about the violation.)
Q: Are there whistleblower protection provisions in the False Claims Act?
Under Section 3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole. Such relief may include:
- Reinstatement
- Double back pay
- Compensation for any special damages including litigation costs and reasonable attorneys’ fees.