The Federal False Claims Act, 31 U.S.C. Sec. 3729, creates liability for the following types of activities:
- making a false claim of payment or approval;
- making or using a false statement or record to get a fraudulent claim paid or approved by the government;
- conspiring with another to get a false claim allowed or paid;
- delivering less property than was paid for by the government;
- making or delivering receipts for property to be used by the government without knowing whether or not the information on the receipt is correct and with the intention of defrauding the government;
- buying or receiving as a pledge, public property from a government employee or officer, or a member of the armed forces, who may not lawfully sell or pledge the property;
- knowingly making a false statement or record to hide, avoid, or decrease an obligation to pay or transmit money or property to the government.

What is a “whistleblower”?

A whistleblower is someone who comes forward and discloses illegal activity, mostly in the workplace. The Federal False Claims Act seeks to reward whistleblowers for exposing fraud against the government.

What does Qui Tam mean?

The term “Qui Tam” is short for “qui tam pro domino rege quam pro sic ipso in hoc parte sequitur,” which, in latin, means “who as well for the king as well for himself sues in this matter.” The term refers to lawsuits filed by private citizens on behalf of the government.

What is a Qui Tam lawsuit?

Qui tam cases are cases brought by private citizens who are suing on behalf of the federal government charging fraud against government contractors and/or others who receive government funds. Qui tam actions serve an important function in the government’s effort to stop fraud. Private citizens are more likely to spot possible fraud in their workplace. The federal government, as big as it is, cannot possibly hope to infiltrate every place where fraud might occur.

What is my employer’s liability for violating the law?

Your employer, if found liable, may have to pay back triple the amount of money owed to the government (also known as treble damages) plus penalties for each false claim. You, as the false claim plaintiff, would receive a percentage of the recovery as a reward for coming forward.

I can’t afford to file a lawsuit just to keep my employer honest. How do I pay for the legal expenses? What’s in it for me?

False claims plaintiffs (also known as “relators”) stand to make between 15-30% of the total amount recovered by the government in a successful Qui tam lawsuit. Since the average recovery in a false claims action is in the millions, it stands to reason that there is quite a bit in it for someone who is willing to come forward and meet all the statutory requirements to successfully file such a claim.

Of course, you will need an experienced Qui tam attorney to help you determine, initially, if your case is solid enough to make a false claims lawsuit worth the time and effort. A Qui tam attorney will usually take a solid case on contingency, which typically means you will not pay attorney fees upfront. Instead, your attorney will be paid from any successful settlement amount or recovery. Whether or not you will have to pay legal costs upfront will depend on your attorney’s fee agreement. If you decide to pursue a Qui tam lawsuit, be sure to question your attorney at length about the fee agreement and the contingency arrangement.

Can’t I just tell the government about the fraud and receive a reward for doing so?

Rewards under the Federal False Claims Act are given only to those who file a qui tam lawsuit and are successful in recovering money for the government. You will not receive a reward simply for telling the government about the fraud or for filing the lawsuit, whether successful or not.

I don’t want to get in trouble. Won’t my employer fire me or treat me badly if I report the fraud?

Your employer is prohibited by law from retaliatory acts against you for filing a qui tam suit, such as demotions, suspensions, threats, harassment, or any other types of discrimination. The consequences for retaliation are steep. The False Claims Act provides for reinstatement, double back pay with interest, and special damages, including legal expenses and reasonable attorney’s fees.  If your employer starts treating you badly, make sure you keep notes of what is being said and done to you. These could be useful in proving the employer's retaliatory conduct. And tell your attorney.

Can I keep my identity a secret?

When the lawsuit is initially filed, there is a period of at least 60 days (but typically, the period lasts years because government attorneys usually ask for many extensions) where the complaint is under seal and is kept strictly confidential. Only the court and the government know your identity. Only after the “seal” period is your identity made public and the defendant is allowed to know that you filed the lawsuit. The “seal” period exists to give the government time to investigate your claims and to decide whether or not to join your lawsuit. (See Whistleblower Lawsuits: When Does the Government Get Involved?)

What's the difference between a qui tam lawsuit and a regular one?

In a “regular” lawsuit, one party serves the party being sued with a complaint detailing the dispute and then files the complaint in a lower federal or state court. The complaint is almost immediately made public. The other party usually files a response. The parties then either go to court or settle their dispute out of court.

A qui tam action is unusual in that it is really a suit that would normally be brought by the local federal attorney general against the person or entity committing fraud, but instead is being brought by a private citizen on behalf of the government. and is accepted by the court "under seal".  This means that the complaint, including the i dentity of the plaintiff, is  kept confidential until the government has had a chance to investigate the facts alleged in the complaint to see if there is a solid case of fraud to be prosecuted.

After the case has been properly investigated (which could take years), the attorney general has four choices: 1) join in the lawsuit and take it over; 2) join in the case and settle out of court; 3) not join in the case (at which point the plaintiff may either drop the case or continue on by him or herself); or 4) dismiss the case all together because it lacks merit.

Is there a deadline for filing a Qui tam lawsuit?

Under the Federal False Claims Act, a Qui tam lawsuit must be filed within the later of the following two time periods:
- Six years from the date of the violation; or
- Three years after the government knows or should have known about the violation, but in no event longer than ten years after the violation of the act.

What if someone else has already filed a Qui tam action against the same company?

If the government or another private citizen has already filed an action against the same company with the same allegations that you would use, then your case would likely be dismissed under the “first-to-file” bar.

How successful have these lawsuits been in recovering money for the government?

Since 1986, when the False Claims Act was strengthened to make it easier for private citizens to sue, over $15 billion have been recovered due to the efforts of private citizen whistleblowers.

(Reviewed 9-08)