The False Claims Act contains qui tam, or “whistleblower," provisions, which allow citizens with evidence of fraud concerning government contracts and programs to sue on behalf of the government in order to recover stolen funds. In compensation for the risk and effort of filing a qui tam case, the citizen whistleblower or "relator" may be awarded a portion of the funds recovered, sometimes as much as 30% of the settlement. One such relator received $126 million from the U.S. government.
In general, the False Claims Act covers fraud involving any federally funded contract or program, with the exception of tax fraud. Types of fraud that fall under the False Claims Act include:
- Medicare and Medicaid Fraud
- Nursing Home Fraud
- Defense Contractor Fraud
- Federal Government Contractor Fraud
- Fraudulent Loans and Grants
Anyone who possesses inside knowledge about a fraud against the government can file a claim as a relator. Successful false claims act cases have been brought by many types of professionals -- defense contractors, research scientists, doctors, as well as nurses and other medical professionals.
Cases can be brought for overbilling the government for goods or services, for billing for goods or services not provided, for preparing a false record or false statement in order to get a fraudulent claim paid, for making a false statement to avoid paying a debt to the government, for falsifying research results, and for manipulating billing procedures in order to overcharge the government, among other scenarios.
SEC Whistleblower Program
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) was signed into law. The Act enhanced the Securities and Exchange Commission’s (“SEC”) whistleblower program by providing whistleblower awards payable by the SEC to those who provide the SEC with information concerning violations of the federal securities laws. The award paid can range between 10% and 30% of the total “monetary sanctions” imposed or collected from a successful action.
The new law enables the SEC to pay an award to those who provide the SEC with “original information” about a violation of the federal securities laws, as well as the Foreign Corrupt Practices Act. “Original information” refers to information that is unknown to the SEC and derived from the whistleblower’s independent knowledge or analysis. The Act defines a “whistleblower” as any individual, or group of individuals (i.e., two or more), who provides information relating to a violation of the securities laws to the SEC, in a manner established by rule or regulation by the SEC.
The Act also strengthens the whistleblower protection provisions of the Sarbanes-Oxley Act and the False Claims Act, and provides for a reward to a whistleblower who provides information to the Commodity Futures Trading Commission.
The Act expressly prohibits retaliation by employers against individuals who become whistleblowers under SEC rules. It provides them with a private cause of action in the event that they are discharged or discriminated against by their employers in violation of the Act. Such an action may be brought in federal court and remedies include reinstatement, double back pay with interest, litigation costs, expert witness fees, and reasonable attorney’s fees.
If you would like to confidentially discuss a possible false claims act violation, or a violation of the federal securities laws, please contact Gerald Silk at 1-800-380-8496 or jerry@blbglaw.com.
