24/7 call for a free consultation 212-300-5196

AS SEEN ON

EXPERIENCEDTop Rated

YOU MAY HAVE SEEN TODD SPODEK ON THE NETFLIX SHOW
INVENTING ANNA

When you’re facing a federal issue, you need an attorney whose going to be available 24/7 to help you get the results and outcome you need. The value of working with the Spodek Law Group is that we treat each and every client like a member of our family.

Client Testimonials

5

THE BEST LAWYER ANYONE COULD ASK FOR.

The BEST LAWYER ANYONE COULD ASK FOR!!! Todd changed our lives! He’s not JUST a lawyer representing us for a case. Todd and his office have become Family. When we entered his office in August of 2022, we entered with such anxiety, uncertainty, and so much stress. Honestly we were very lost. My husband and I felt alone. How could a lawyer who didn’t know us, know our family, know our background represents us, When this could change our lives for the next 5-7years that my husband was facing in Federal jail. By the time our free consultation was over with Todd, we left his office at ease. All our questions were answered and we had a sense of relief.

schedule a consultation

Blog

What is a Qui Tam Lawsuit? A False Claims Act Primer

March 21, 2024 Uncategorized

What is a Qui Tam Lawsuit? A False Claims Act Primer

Qui tam lawsuits allow whistleblowers to file fraud claims on behalf of the government. But what exactly are these cases, and how do they work? This article provides a primer on qui tam actions and the False Claims Act (FCA) – the main law behind these unique lawsuits.

What is a Qui Tam Lawsuit?

A qui tam lawsuit is filed by a whistleblower, known as a “relator,” who alleges fraud against the federal government. The relator brings the suit on behalf of the government as well as themselves.

The term “qui tam” comes from a Latin phrase meaning “who as well for the king as for himself sues in this matter.” It refers to the two-part nature of these cases – the relator sues both for the government and for a potential reward.

Most qui tam cases today arise under the federal False Claims Act (FCA), a law passed during the Civil War to combat fraud by military contractors. The FCA allows relators to sue on behalf of the government and receive a portion of any recovery.

Main Elements of a Qui Tam Lawsuit

Here are the key components of a qui tam case under the False Claims Act:

  • The relator files a lawsuit alleging fraud against the federal government. They must have direct and independent knowledge of the fraud.
  • The case is filed under seal and served on the government, not the defendant. This allows the government time to investigate the allegations.
  • The government can choose to intervene in the case and take over the litigation. If they decline, the relator can proceed alone.
  • If successful, the relator receives a reward of 15-30% of the recovery. The rest goes to the government.
  • The FCA prohibits employer retaliation against whistleblowing employees.

Types of Fraud Covered by the FCA

The False Claims Act imposes liability for knowingly submitting false claims to the government. This includes:

  • Overbilling Medicare, Medicaid, or other federal programs
  • Charging for services or goods that were not provided
  • Falsely certifying compliance with a statute or regulation
  • Concealing obligations owed to the government
  • Making false records or statements to get a false claim paid

Common targets include healthcare providers, defense contractors, and any entity receiving significant federal funds. But qui tam suits can arise in many industries if fraud against the government occurred.

History of the FCA and Qui Tam Lawsuits

The False Claims Act was enacted in 1863 during the Civil War. Stories of fraud by military contractors led Congress to pass the law, which included the first qui tam provisions.

The relator’s share was originally set at 50% of the recovery. But some saw this as creating perverse incentives, leading to amendments reducing the reward.

Use of the FCA declined through most of the 20th century. But amendments in 1986 revived qui tam suits by increasing incentives and protections for whistleblowers. Since then, recoveries under the law have skyrocketed into the billions.

Steps in Filing a Qui Tam Lawsuit

Here is the basic process for a relator filing a qui tam case:

  1. The relator prepares a detailed complaint outlining the allegations of fraud, along with supporting evidence.
  2. The complaint is filed under seal with the appropriate federal court.
  3. A copy of the complaint and evidence is served on the Department of Justice.
  4. DOJ investigates the allegations to decide whether to intervene in the case.
  5. If DOJ intervenes, they take over primary control of the litigation. If not, the relator proceeds alone.
  6. If successful, the relator receives 15-30% of the recovery as a reward.

An experienced qui tam attorney can help a whistleblower navigate this complex process and put together a compelling case.

DOJ Intervention Decision

A key point in any qui tam case comes when DOJ decides whether to intervene after investigating the allegations. DOJ intervenes in only about 25% of cases, with relators proceeding alone in the rest.

If DOJ intervenes, it greatly increases the chances of a sizable recovery. But even without intervention, experienced relators’ counsel can still achieve success.

DOJ likes to see strong evidence of fraud, sizable damages, non-public information, and credible relators without complicating factors.

Relator’s Share of the Recovery

If a qui tam case succeeds, the relator receives a percentage of the recovery as a reward. The FCA provides a range of 15-30% based on whether DOJ intervenes and other factors:

  • If DOJ intervenes, the relator gets 15-25%
  • If DOJ doesn’t intervene, the relator gets 25-30%
  • The judge can reduce the share for relators who planned the fraud
  • The share may increase for relators who report fraud soon after discovery

In a case involving billions in single damages, even the minimum 15% relator share could equal millions.

Retaliation Protections for Relators

The FCA prohibits retaliating against employees for investigating or filing a qui tam case. Remedies can include:

  • Reinstatement
  • Double back pay
  • Litigation costs and attorneys’ fees

However, relators should still be prepared for the possibility of negative consequences or a hostile work environment.

Qui Tam Case Statistics

Here are some key statistics on False Claims Act qui tam lawsuits:

  • Over $70 billion in recoveries since 1986
  • About 600-700 new cases per year
  • DOJ intervenes in about 25% of cases
  • Healthcare fraud is the most common allegation
  • Average settlement around $5.6 million

With billions in recoveries and a fair chance of success, qui tam suits can be attractive for relators with knowledge of fraud against the government.

An Effective Qui Tam Attorney is Crucial

Preparing and filing a qui tam lawsuit is complex. Working with an experienced FCA attorney is highly recommended for would-be relators.

A knowledgeable attorney can help assess if you have a viable case, navigate the process, and put together a compelling complaint with supporting evidence.

If DOJ declines to intervene, skilled relators’ counsel becomes even more critical for litigating against often well-resourced defendants. Counsel who regularly handle these cases will know how to maximize your chances of success.

Potential Relators Should Proceed Carefully

For potential relators, there are risks as well as potential rewards in filing a qui tam case. Here are some things to keep in mind:

  • Have detailed evidence of fraud, don’t rely on hunches
  • Be prepared for DOJ to decline intervention
  • Expect employer retaliation, even though it’s illegal
  • Carefully follow the seal requirements
  • Hire an experienced attorney you can trust

While qui tam suits can serve the public interest, relators should go in with eyes open to the challenges and complexities these cases involve.

Conclusion

Qui tam lawsuits under the False Claims Act offer a unique opportunity for whistleblowers to report fraud against the government while also obtaining a financial reward. But these cases require credible evidence, patience, and persistence to achieve success.

By shining a light on schemes to illicitly take taxpayer funds, qui tam relators can make an important difference. They also frequently receive life-changing rewards for their efforts.

With billions in recoveries and the chance to do good while doing well, qui tam suits will likely remain an important tool for years to come.

Sources

Lawyers You Can Trust

Todd Spodek

Founding Partner

view profile

RALPH P. FRANCHO, JR

Associate

view profile

JEREMY FEIGENBAUM

Associate Attorney

view profile

ELIZABETH GARVEY

Associate

view profile

CLAIRE BANKS

Associate

view profile

RAJESH BARUA

Of-Counsel

view profile

CHAD LEWIN

Of-Counsel

view profile

Criminal Defense Lawyers Trusted By the Media

schedule a consultation
Schedule Your Consultation Now