Qui Tam/False Claims Act
What Is The False Claims Act?
The False Claims Act is a federal law that has become the most powerful tool used to combat fraud against the government by allowing private citizens to sue individuals or businesses who defraud the government – and receive an award for doing do.
The False Claims Act, sometimes referred to as the “Lincoln Law," is a longstanding law passed during President Abraham Lincoln's administration in response to unscrupulous contractors cheating the government during the Civil War, but in 1986, the False Claims Act underwent significant changes to expand the role of whistleblowers in rooting out fraud against the government. Since then, many states have enacted state false claims acts to combat fraud against state governments and reward whistleblowers as well.
What Is A False Claim?
The essence of a False Claims Act case is that the government was cheated in one form or another. This cheating, or fraud, is referred to as a “false claim,” which can take many forms. For instance, a false claim could include: overcharging for a product, failing to perform a service, delivering less than the promised amount of goods or services, underpaying money owed to the government, providing inferior products, failing to comply with program restrictions, charging for one thing but delivering another, and violating a governmental regulation, just to list a few examples.
The legal definitions of a false claim can be found in section § 3729 of the Act.
What Are The Penalties for Violating the False Claims Act?
A company or individual that has made a false claim to the government may be liable for triple damages, a civil fine of $5,500 to $11,000 per false claim, and the attorney's fees of the whistleblower (who is often called the “relator"). Individuals or companies that cause someone else to submit a false claim can also be found liable under the False Claims Act.
Can Private Citizens Use the False Claims Act?
The False Claims Act's qui tam provision allows private citizens to file a lawsuit on behalf of the government and recover between 15 and 30 percent of the government’s recovery from the defendant.
How does the False Claims Act Work?
Anyone who is aware of fraud against the government can file a case under the False Claims Act. Many special procedural requirements must be met, however, so it is important to consult with an attorney as early as possible in the process.
For example, claims regarding the federal government must be filed in federal district court, under seal, and a copy must be served on the U.S. Attorney General. When a complaint is filed under seal, it is highly confidential, with no one other than the court and the applicable government authorities allowed to know that the complaint exists. The complaint will not be served on the defendant until the court so orders, and the complaint will usually remain under seal for at least 60 days while the Department of Justice (or similar state agency) investigates and decides whether to join the case.
If the government does decide to join the case, which is called an intervention, the government will lead the prosecution seeking a settlement or trial victory. If the government declines to join the case, the whistleblower is typically entitled to go ahead with the lawsuit, and prosecute the case on behalf of the government.
How do Private Citizens Take Action?
If you know about or suspect a False Claims Act violation, you should contact a whistleblower, or qui tam attorney.
Specific procedures need to be followed, and there may be sensitive employment issues involved with the case as well. The whistleblower attorneys at Brewer Law Firm, LLC focus on helping whistleblowers report fraud and we will provide you with a free, confidential consultation to discuss a possible case.
Call us at 843.779.7454 or contact us online.
Unlike many law firms, we offer flexible fee structures to fit our clients’ needs. We regularly represent businesses and individuals on a contingency-fee or part-contingency-fee basis, where our compensation is directly tied to the results we obtain. For clients who prefer a more traditional fee arrangement, we also offer hourly rate fee agreements.
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