The False Claims Act Guide: Do You Know About Fraud Against the U.S. Federal Government and Its Programs?
A Whistleblower Lawyer Can Help You Recover Money and Protect Your Job Under the False Claims Act and Qui Tam Laws
If you know of a health care provider, military contractor, construction company, or other business committing fraud against the United States federal government, a Virginia whistleblower lawyer can help you determine your legal options and the best path forward.
The False Claims Act (FCA), found at 31 U.S.C. §§ 3729 – 3733, gives private citizens who know or discover fraud against the federal government the power to sue on the government’s behalf.
And if your False Claims Act lawsuit ends with the defendant paying money to the government, you can recover a significant amount. Under the FCA’s qui tam statute, a whistleblower receives a percentage of the amount the government recovers, typically compensatory damages, civil penalties, and treble damages (i.e., three times the government’s damages).
So, call a False Claims Act attorney in Virginia now: (804) 251-1620. You have an opportunity to not only do your civil duty of reporting fraudulent activity against you and fellow taxpayers but also receive a sizable financial reward.
Overview of the False Claims Act
The False Claims Act generally applies to any individual or business that directly or indirectly contracts with and is paid for services by the federal government.
The False Claims Act establishes liability for any individual or business that knowingly submits or causes to be submitted a false or fraudulent claim with the intent of obtaining payment or approval from a federal agency or federally funded program. Conspiring to commit any of these acts can also be considered a violation of the False Claims Act.
In addition, if an individual or entity failed to conduct due diligence (i.e., they should have known that it was billing the government improperly), that can serve as sufficient grounds for a False Claims Act violation.
Further, the FCA imposes civil liability on persons or businesses that make a false claim to avoid paying the federal government money.
The FCA’s Knowledge Requirement
Knowledge that a claim is false is critical to the False Claims Act. A person or entity knew of the falsity when the evidence shows they have:
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- Actual knowledge,
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- Exercised deliberate ignorance of the truth, or
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- Recklessly disregarded the truth or falsity of the information underlying the claim for payment to the federal government or its programs.
Origins: Why Do We Have a False Claims Act?
The United States Congress enacted the False Claims Act during the American Civil War for two reasons.
First, defense contractors committed fraud, ripping off the Union Army. For example, some government contractors would bill the Army multiple times for the same horse (duplicate billing), ship boxes of sawdust instead of bullets, sell poorly manufactured blankets and uniforms that fell apart with minimum wear, deliver defective guns and ammunition, and provide unseaworthy ships to the Navy,
Second, the ongoing war effort hindered the government’s ability to investigate and prosecute suspected fraud.
Empowering private citizens to file lawsuits against dishonest government suppliers under the False Claims Act helped the U.S. government fight fraud that weakened its military’s ability without taking personnel away from their primary tasks.
Congress has amended the FCA several times.
Although the False Claims Act’s initial purpose was to stop government contractors’ fraud in defense spending, most current claims involve health care fraud against the Medicare, Medicaid, and Tricare health programs.
Examples of Acts That Can Lead to Liability Under the False Claims Act
There are myriad ways in which individuals and businesses attempt to defraud the government with fraudulent claims for payment.
Common examples of false claims include:
- Kickbacks and self-referrals by medical providers. These practices are prohibited when billing Medicare, Medicaid, or other federally funded healthcare programs. Evidence of a provider engaging in kickbacks could be considered a direct violation of 42 U.S.C. § 1320a-7b(b), also known as the Anti-Kickback Statute. Evidence of a provider engaging in a self-referral could be considered a direct violation of the Stark Law.
- Charging the government for medical services not provided. For example, a mental health provider billing the federal health program for services they did not provide to patients.
- A physician falsely certifying that a medical procedure is medically necessary to obtain payments from a federal health program.
- Using a physician identifying number to bill for a service provided by a nurse practitioner or a physician’s assistant to obtain a higher reimbursement rate from a federal health program.
- Upcoding. This occurs when a health care provider uses a diagnosis code that reflects medical complications or more complex medical procedures when there were none, all to obtain a higher reimbursement from the federal government.
- Billing the federal government for supplies it did not order.
- Timesheet fraud by defense contractors where they charge employee labor to the government contract when the employee performed work on a non-government job with lower pay rates.
- Submitting false cost or pricing data to the government when negotiating a contract on a cost-plus contract.
- Using false diagnosis codes to obtain payment for medical services that federal health programs do not cover.
- Charging the federal government or a federal health program for an inferior product that does not meet the minimum specifications and requirements.
- False cost reports filed by nursing homes, hospitals, and other medical providers. False and inaccurate reports are prohibited, notably when filed to inflate overall costs incurred or to falsify the types of costs when seeking reimbursement from the federal government.
- Fraud by medical testing labs who bill the federal government for medical tests they did not perform.
- Fraud by building contractors on federal government housing projects, billing for substandard work and work not performed.
- Submitting false information to obtain an FHA mortgage or other government benefit.
- Fraud by pharmaceutical companies billing the federal government for excessive amounts of medications never used or prescribed to patients.
- Pharmacies short-filling prescriptions so the government pays more for the medication received. For example, telling the patient there are 30 pills in the bottle when there are only 25.
What are the Penalties for Violating the False Claims Act?
Violating the False Claims Act can have significant repercussions for any individual or business because the law contains both civil and criminal penalties.
Regarding civil liability, the federal government can pursue treble damages (which means triple damages), in addition to a penalty of up to $11,000 per claim.
Regarding criminal liability, health care providers convicted of intentionally presenting fraudulent claims to the government for reimbursement face five up to five years in prison and a fine of $250,000 to $500,000 for a felony conviction.
Whistleblower Defined
A whistleblower is a person who reports fraud, corruption, waste, or dangers to public safety and health to the right people by following the appropriate procedural steps.
When you act after discovering another person or business submitting fraudulent claims to the federal government, you blow the metaphorical whistle on the fraudulent activity. Hence the name “whistleblower.“
Officially, the False Claims Act refers to whistleblowers as “relators.”
What’s In It for the Whistleblower? The False Claims Act’s Qui Tam Provision.
If you are a potential whistleblower reading this article, the False Claim Act’s qui tam provision is the part of the law that may interest you the most.
The False Claims Act makes it worthwhile for whistleblowers to report fraudulent activity by providing a financial incentive to anyone who provides notice of fraudulent claims.
A qui tam claim is a civil lawsuit filed by a private party against a company or individual allegedly defrauding the federal government. “Qui Tam” is a Latin phrase that means “he who sues on behalf of the king sues for himself as well.”
A qui tam lawsuit is filed “under seal,” meaning it will be kept confidential from the public, except for the federal government. This allows the U.S. Department of Justice to have time to investigate the allegations and determine whether to proceed with a lawsuit against the offending party.
If you are considering becoming a whistleblower under the False Claims Act, I recommend speaking with a False Claims Act attorney to discuss how to file a qui tam claim. One procedural mistake can cost you your job and the ability to recover fair compensation for exposing government fraud.
What to Expect as a Qui Tam Plaintiff in Virginia
The prospect of moving forward as a whistleblower under the False Claims Act can be intimidating and overwhelming. The information below is to help shed light on what you can expect as a plaintiff in a False Claims Act lawsuit:
Disclosure Statement
After hiring a Virginia False Claims Act lawyer, one of the first steps is getting to work on drafting a disclosure statement. The False Claims Act requires you to present the federal government with a “written disclosure of substantially all material evidence and information the person possesses.”
The disclosure statement provides an opportunity to show the federal government that the defendant is committing fraud and that you can prove it.
This statement serves as a roadmap for the federal government to conduct its investigation, so your disclosure statement needs to offer details and hold nothing back. Whatever information may assist in uncovering the necessary evidence to prove the fraud needs to be in the disclosure statement.
I recommend reviewing your disclosure statement with a False Claims Act lawyer multiple times to ensure its accuracy and ability to persuade the federal government that the defendant is submitting false claims. Many people within the government will read this statement; however, it generally remains confidential and is not made available to the public.
Evidence
While drafting a disclosure statement, your Virginia qui tam lawyer will also review any documents and materials you have. This exhaustive review includes the following:
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- Business records
- Email communications
- Text messages
- Recordings
- Anything else that might be of use
All these documents and materials will likely be presented to the federal government to assist in its investigation of the alleged fraudulent activity.
Filing the Qui Tam Complaint
Once the disclosure statement is drafted and ready for prime time, you must file the qui tam complaint against the defendants in federal court under seal.
The court clerk will provide a copy of the complaint to the assigned judge and certain members of the U.S. Attorney’s Office (the Attorney General of the United States).
Your qui tam complaint remains under seal for at least 60 days. The court can – and often does – extend the period your pleadings remain under seal to give the government time to investigate the fraud allegations. Extensions in six-month increments are common.
The Government Investigates the Whistleblower’s Lawsuit
Relevant evidence of the alleged fraudulent activity is so vital to a successful qui tam action that I discuss it twice in this section.
For context, the federal government will reject entirely unsubstantiated False Claims Act complaints.
But if your complaint includes documents and data to support your allegations, the U.S. Attorney’s Office may investigate the facts with the help of law enforcement agencies such as the FBI or the DEA.
Typically this factual investigation involves OIG subpoenas that require the accused wrongdoers to produce corporate, financial, billing, business, and communications records.
The Government Decides Whether to Intervene in the Qui Tam Action
Once the federal government completes its review of relevant records and evidence, it will determine whether it will support you and intervene in the legal action or whether the government will drop out and let the relator continue on its own. Intervention requires approval from the DOJ’s Washington D.C. headquarters. If the government intervenes, the DOJ will typically amend the complaint to include additional causes of action, such as Anti-Kickback Statute and Truth in Negotiation Act violations.
Negotiating a Qui Tam Settlement
Parallel to the government serving subpoenas (and thereby notifying the defendants of the pending litigation), negotiations between the government and the defendant’s legal counsel will likely occur. However, depending on the complexity of the case and allegations of fraud, it may take multiple months for any meaningful settlement negotiations to resolve the lawsuit.
Proving Qui Tam Liability at Trial
If the defendant (or defendants) refuse to settle the lawsuit and a judge or jury finds them liable at trial, the court can order the defendants to pay as much as three times the government’s losses plus penalties of up to $ 11,000 per claim.
Whistleblower Qui Tam Monetary Reward
If a False Claims Act lawsuit is successful based on the evidence you provide, you may be entitled to a reward between 15-20 percent of recovered funds if the government intervenes.
If the government chooses not to intervene and you prevail in the qui tam litigation, you may be able to receive even more – between 25-30 percent of the amount recovered.
Qui tam actions routinely involve millions of dollars in damages; consequently, a relator’s recovery can be significant. For example, in 2023, whistleblowers received nearly $350 million for their efforts, according to the DOJ’s False Claims Act Report.
Under federal law, the first person to file a case usually recovers the reward. Thus, whistleblowers should refrain from discussing alleged fraudulent conduct with other parties, as another individual can obtain the award if they file the qui tam lawsuit first.
Benefits of Hiring an Experienced Qui Tam Whistleblower Lawyer in Virginia
Qui tam actions involving fraud allegations can be complex and challenging, involving numerous witnesses to interview or depose and millions of pages of documents.
Make no mistake: a qui tam action with you as the whistleblower is high-stakes litigation.
The complexity of the False Claims Act, the scope of litigation needed to prove your claim, and the risks and rewards of being a whistleblower are why it makes sense to retain the services of a skilled and knowledgeable Qui Tam lawyer in Virginia. When you have an attorney on your side, they can take the following actions on your behalf:
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- Protect you from illegal retaliation for reporting fraud
- Conduct a thorough investigation
- Monitor filing deadlines
- Draft and file legal paperwork (e.g., disclosure statement, complaint, etc.)
- Communicate with government officials
- Negotiate a whistleblower settlement
- Try your case
Protect Your Rights as a Whistleblower
Remember the following items if you want to protect your qui tam case and statutory rights as a whistleblower:
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- Take action sooner rather than later: To obtain a percentage of any recovery, you need to be the first whistleblower to file a qui tam lawsuit. If someone else files first, you cannot secure a portion of the recovery.
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- Do not share details of the allegations with anyone other than your whistleblower lawyer: Once you report the facts you have to your lawyer, do not share or discuss details of your qui tam case with anyone else. Why? Because keeping the matter confidential mitigates the risk that a third party will take your information and be the first to file a qui tam action. It also avoids the risk of having your case dismissed or the court holding you in contempt for revealing information after a case is filed and placed under seal.
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- Hire an Experienced Virginia Qui Tam Lawyer: Whistleblower cases can be highly complex and cost a significant amount of money upfront to litigate. Depending on the facts and evidence of the alleged fraud, your attorney may be willing to advance those costs and take the financial burden off of your shoulders. These are just some reasons why hiring an experienced and knowledgeable qui tam lawyer in Virginia is imperative.
Have Questions About Qui Tam Litigation? Contact an Experienced Richmond False Claims Act Lawyer
If you are aware of fraud against the government and have questions about what steps to take to hold the wrongdoer accountable, then now is the time to contact our law firm to discuss your legal options.
Contact one of our whistleblower lawyers today to schedule a free, confidential consultation. You can reach us at (804) 251-1620 or (757) 810-5614. If you decide to initiate a legal action with us, you pay no fees unless and until you win compensation
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