Any person may bring a lawsuit under the federal False Claims Act against any individual or business who has defrauded the U.S. government by submitting false or otherwise fraudulent claims for payment. Federal false claims litigation can involve any government program, including Medicare, defense and national security appropriations, food safety and inspection payments, federally-insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, and disaster assistance. False claims cases are sometimes called “qui tam” cases from the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “[he] who sues in this matter for the king as well as for himself.”
Because those who defraud the government hide their misconduct from public view, whistleblowers in qui tam cases are often essential to uncovering the truth. This person is called a “relator” and in many cases is an employee or a former employee of a company committing the fraud, or a contractor or subcontractor who discovers the fraud on the government. A relator’s claims cannot be filed based solely on public information—instead, a relator must have some direct, first-hand knowledge of the fraud, even if they did not participate in the wrongful conduct.
Unlike most civil lawsuits, a complaint is filed under seal with the court. While the case is under seal, neither the bad actor nor the public knows of the case, and during this time the U.S. Department of Justice investigates the claim. The federal government has the option of intervening in the case or declining to prosecute. If DOJ opts out of the case, the relator can proceed with the claim. To reward relators for reporting the fraud on the government, the False Claims Act provides for awards of up to 30 percent of any monetary recovery that the government receives if the case is successful.
For states that have their own version of a false claims statute, whistleblowers can be awarded a portion of the amounts recovered by the state government from litigation against those who commit fraud against public sector entities. In some states, such a New Jersey, the false claims act can be triggered even when presenting a fraudulent claim to an agent of the government or to a contractor or other recipient of state funds.
False claims matters must remain confidential, so it is important not to discuss your potential case with anyone other than your attorney to protect your ability to recover under the False Claims Act.
If you believe you have first-hand knowledge of fraud against a federal or state governmental agency or program, SMB can help you report it and perhaps obtain a significant amount of compensation for you in return.