When employees have non-public information about their employers’ fraud against the government, they have the right to report the information to the government under the False Claims Act. This law provides financial incentives to whistleblowers when the information they provide results in the government’s recovery of money it is owed.
Under the False Claims Act, whistleblowers can receive mandatory minimum payments for providing information that allows the government to successfully recover money. These statutory minimums are mandatory and guaranteed, and they frequently range into millions of dollars. Here is some information about the purpose of the False Claims Act from the attorneys at Swartz Swidler.
What Is the Purpose of the False Claims Act?
The False Claims Act was originally passed during the Civil War and was signed by President Abraham Lincoln on March 2, 1863. It was meant to help the government combat widespread military contracting fraud by providing incentives to citizens to come forward and report it. In 1986, the False Claims Act was amended by Congress to allow whistleblowers to bring claims on the government’s behalf for other types of fraud beyond fraud in military contracting. Other whistleblower laws have also been passed at both the federal and state levels that cover securities fraud, tax fraud, commodities fraud, and others.
Whistleblower Rewards Under the False Claims Act
Under the False Claims Act, if you provide original, non-public information that results in the government’s recovering money it is owed, you are entitled to receive a payment ranging from a minimum of 15% to a maximum of 30% of the total amount the government collects. If the government fails to pay the reward, you can enforce it in court.
Once you file an action, it is important that you request an official acknowledgment from the government. You will also be required to fully cooperate with the resulting investigation of your complaint.
The reason why the False Claims Act and other whistleblower laws have been enacted is that the government could not discover many different instances of fraud against it without the help of whistleblowers. For example, the government recovered $44.7 billion based on the information provided by whistleblowers by 2019. By contrast, it only recovered $17.3 billion in fraud cases that did not involve whistleblowers.
What Happens When a Qui Tam Complaint Is Filed?
Claims filed under the False Claims Act are called qui tam complaints. Once you file a qui tam complaint in court, you will need to serve it on the Attorney General and the U.S. Attorney’s Office. Once your complaint is filed and received, the government must investigate the information you have provided. Qui tam complaints are filed under seal, meaning that your employer will not initially know that your complaint has been filed. Once the government’s investigation is completed, the Department of Justice will decide whether to intervene and will report its decision to the judge. At that time, the case will be unsealed and placed on the public court docket.
If the government decides to intervene, it means that it will take over the case and prosecute the perpetrator of the fraud. You will still be a party to the case and can participate, but you will not be responsible for litigating the case. If the government declines to intervene, you will have the right to litigate the case without the government’s help. However, litigating a qui tam case after the government has declined it can be difficult. Qui tam defendants aggressively defend against their cases.
An important provision of the False Claims Act provides protection to whistleblowers. Your employer cannot harass, demote, or terminate you in retaliation for filing a qui tam action. If your employer retaliates against you once it learns that you filed a lawsuit, you can file a retaliation claim. Through a retaliation claim, you might recover double back pay, special damages, attorney’s fees, litigation costs, and be reinstated to your job.
How Do You File a Qui Tam Action?
You can file a qui tam lawsuit confidentially and under seal in a federal district court. You will have to serve a copy of the complaint together with a written disclosure statement of all of the material evidence and information you have about your employer’s fraudulent actions on the U.S. Attorney General and the U.S. Attorney in the district where your complaint has been filed.
Your complaint will be under seal for 60 days while the allegations are investigated. However, the government can ask for an extension to complete its investigation. In many cases, the seal will continue for months or years. All of the information contained in the complaint and the complaint itself must remain confidential until the court lifts the seal. You do not serve a copy of the complaint on the defendant. If you violate the seal, the court can dismiss your case.
You must also submit all of the information you possess to the government when you file the complaint. Your disclosure statement provides a factual basis of the complaint you have filed under seal with the court.
False claims cases frequently remain under seal for a long period of time. The government must file reports with the court explaining why it is asking for each extension. The case will not be unsealed until the government makes its decision whether to intervene or to decline to do so. Once it is unsealed, it will proceed in the same way that other civil cases do. Some cases are resolved fairly quickly, but others might last for several years.
Get Help From the Qui Tam Lawyers at Swartz Swidler
If you have inside knowledge that your employer has perpetrated massive fraud against the government, you should speak with the attorneys at Swartz Swidler. We can review your case and explain whether you might have a viable qui tam case. To learn more about your potential legal options, contact us today at (856) 685-7420.