How Whistleblowers Can Collect Rewards Under the False Claims Act

How Whistleblowers Can Collect Rewards Under the False Claims Act

The False Claims Act is a powerful tool that allows whistleblowers to file lawsuits on behalf of the U.S. government against companies or individuals that are defrauding the government. These lawsuits are known as “qui tam” suits. If the lawsuit is successful, the whistleblower can receive a portion of the money recovered by the government.

Here’s an overview of how the False Claims Act works and how whistleblowers can collect rewards under this law:

What is the False Claims Act?

The False Claims Act (FCA) is a federal law that imposes liability on persons and companies who defraud the government. The law includes a “qui tam” provision that allows private citizens to bring suit on behalf of the government against entities that are submitting false claims.

The FCA was originally passed by Congress in 1863 to combat fraud by suppliers of the Union Army during the Civil War. The law was strengthened in 1986 by the False Claims Amendments Act, which increased incentives for whistleblowers to file FCA lawsuits.

Under the FCA, the defendant can be liable for up to three times the amount of damages sustained by the government, plus civil penalties ranging from $5,500 to $11,000 per false claim. The law applies to any federally funded program, including Medicare, defense contracts, research grants, and more.

Who Can File a Qui Tam Lawsuit Under the FCA?

The FCA allows private citizens, known as “relators,” to file qui tam lawsuits on behalf of the U.S. government against entities that are defrauding the government programs. A relator could be an employee, former employee, competitor, or really anyone with inside information about the fraud.

To file a qui tam case, the relator – with the help of an attorney – prepares a complaint detailing the fraudulent activity and files it under seal in federal court. This allows the government time to investigate the allegations before the defendant is notified. The case remains under seal for at least 60 days, but can remain sealed for years in some cases.

How Does the Government Proceed with a Qui Tam Case?

After receiving the qui tam complaint, the Department of Justice (DOJ) has several options:

• Intervene in the case – This means the DOJ takes over primary responsibility for prosecuting the claim, although the relator remains a party to the suit.
• Decline to intervene – If the government declines, the relator can proceed with the lawsuit on their own.
• Seek dismissal – The DOJ can seek to have the case dismissed, but the relator has a right to contest the dismissal.
• Settle – The DOJ can negotiate a settlement with the defendant at any point during or after its investigation.

If the DOJ intervenes in the case, the chances of recovery are much higher. But relators can still receive an award if the DOJ declines as long as they proceed with the lawsuit and are successful.

How Are Whistleblower Awards Calculated Under the FCA?

If the FCA lawsuit is successful – whether led by the DOJ or the relator – the whistleblower is entitled to receive a percentage of the recovery as an award:

• 15-25% if the DOJ intervened in the case
• 25-30% if the DOJ did not intervene

The exact percentage depends on the extent to which the relator contributed to the prosecution of the case. The more information and assistance the relator provides, the higher the reward amount. Awards can range from millions to hundreds of millions of dollars in successful cases.

In addition to the monetary award, the FCA provides protection for whistleblowers against retaliation. Employees who face adverse actions for filing an FCA suit can receive reinstatement, back pay, and other remedies.

Notable Examples of FCA Whistleblower Awards

Here are some examples of large whistleblower awards granted under the False Claims Act in recent years:

• In 2018, two whistleblowers split an award of $100 million in a Pfizer off-label marketing case.
• In 2020, a whistleblower received $20 million in a kickback case against a South Dakota health system.
• In 2022, a whistleblower was awarded $27 million in an FCA case against Teva Pharmaceuticals.

The largest FCA award to date went to a single whistleblower – $104 million in 2016 from a case against Wyeth Pharmaceuticals. The huge awards in these cases demonstrate the financial incentives available to whistleblowers under the FCA.

Should You Hire an Attorney to File an FCA Qui Tam Case?

The process of filing a False Claims Act lawsuit and collecting a whistleblower reward can be complicated. Working with an experienced whistleblower attorney is highly recommended to successfully navigate the system.

An FCA lawyer can help determine if you have a valid claim, gather evidence and information to support the allegations, prepare the qui tam complaint, and represent you throughout the legal process. This can greatly increase your chances of the case being successful and maximize your reward.

Many whistleblower law firms work on a contingency fee basis, meaning you don’t pay anything up front and they take a percentage of the reward if you win. This makes hiring an attorney accessible for most whistleblowers.

What Should You Do If You Discover Fraud Against the Government?

Here are some tips if you have knowledge of fraudulent activity against a government program and are considering blowing the whistle:

• Gather as much evidence and documentation as possible to support your claims.
• Consult with an experienced whistleblower attorney about your potential FCA case.
• Move quickly – the first whistleblower to file generally gets priority.
• Follow your company’s internal reporting procedures first if possible.
• Be prepared to provide assistance to the DOJ during their investigation.
• Know that the process may take several years, but the reward could be worth it!

Blowing the whistle on government fraud takes courage, but the False Claims Act protects and rewards people who come forward. With huge potential payouts and a process designed to shield whistleblowers from retaliation, filing an FCA qui tam suit could be life-changing.

The False Claims Act enables everyday citizens to make a real difference in protecting taxpayer dollars and government programs from unscrupulous corporations and individuals. With the help of experienced whistleblower attorneys, filing a qui tam case and collecting a reward could be within your reach.