Whistleblowers, called relators under the False Claims Act, may file complaints alleging violations of the FCA under seal with the Department of Justice. FCA lawsuits initiated by relators are known as qui tam actions and, if successful, a relator is entitled to share in a portion of the government’s recovery from those lawsuits.
Where the Government intervenes in a relator’s case and takes over the litigation, the whistleblower is entitled to between 15 and 25 percent of the Government’s recovery. On the other hand, if the Government declines to intervene, a whistleblower may still litigate the action on the Government’s behalf. In those matters, known as declined or non-intervened cases, relators are eligible for 25 to 30 percent of any recovery made.
To establish a cause of action under the FCA, one must demonstrate that a person or company knowingly presented, or caused to be presented, a false or fraudulent claim for payment to the federal government. Or one must demonstrate that an individual or entity made a false record or statement to get such a claim paid.
In addition, liability can be established under the FCA pursuant to a “reverse false claim” theory. A reverse false claim can be demonstrated where a defendant knowingly made, used, or caused to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government or knowingly concealed or knowingly and improperly avoided or decreased an obligation to pay or transmit money or property to the Government.
Finally, FCA liability can be shown through conspiracy. Such a conspiracy entails the existence of an unlawful agreement between the defendants to get a false or fraudulent claim reimbursed by the government and at least one act performed in furtherance of that agreement.
Where liability can be shown, the potential for damages in FCA cases can be significant. The statute calls for damages available to the Government to be trebled (or tripled). Civil penalties are also provided for by the FCA. These penalties are adjusted yearly for inflation and, in 2022, range from $11,803 to $23,607 per violation. In addition, the FCA requires defendants to pay successful relators’ reasonable attorney fees, costs, and expenses.
Whistleblowers bringing FCA claims are often employees or ex-employees of the target defendant. But other individuals and organizations that could potentially have information serving as the basis for a FCA action include competitors of the target; non-profits; financial analysts; patients; fraud victims; data analytics professionals; or industry experts. The FCA does not require whistleblowers to be company insiders.
If you are considering reporting information to the Government, please fill out our online form or contact us by phone at (267) 551-5240 or via e-mail at [email protected] for a free, confidential consultation.
