The False Claims Act (FCA) is about going after dishonest companies and individuals who are stealing our tax dollars and lining their own pockets. It is about rewarding you for your honesty in bringing their dishonesty to light. It is about you, as the whistleblower, being the hero in these matters. The rewards can be and have been BIG, as the whistleblower (also called the relator) can receive between 15% to 30% of the sums recovered by the federal and/or state governments. Now more than ever, our governments need to recoup the stolen funds because we are in a deficit crisis of huge proportions. Under the False Claims Act, whistleblowers have been responsible for putting over 30 billion dollars back into government hands, and that is really only the tip of the iceberg. This past year alone, the government will likely collect 9 billion dollars as more and more heroes are coming forward and refusing to sit quietly by while their company is ripping off our state and federal governments. These whistleblowers are recognizing that this is their patriotic duty to report the fraud, and that they will be handsomely rewarded for their efforts.
Our law firm is experienced in handling False Claims Act cases. We were among the 8 relators who recovered 2.1 billion dollars for the government against Pfizer in 2009. We have have helped recover millions for the government and have substantial cases pending which are currently under seal or about to be filed. Our clients have been heroes in these cases and have walked away with substantial sums as their reward. We are hoping you too will step up and become a hero as well.
HOW DOES IT WORK?
The False Claims Act is designed to encourage good people to come forward and blow the whistle on fraudulent schemes which steal our tax dollars. People often refer to such an action as a Qui Tam action, which is a Latin term meaning “suing on behalf of the King.” The individual who comes forward and files a claim on behalf of the federal government and/or the state government is sometimes referred to as a relator.
If you are a potential relator and you have information about a fraudulent scheme, it is imperative that you contact a successful local Qui Tam lawyer in order to discuss the pros and cons of proceeding with a FCA lawsuit. Careful considerations need to be explored to make sure the decision to proceed is in your best interest. All communications with our law firm are confidential. No one else will know you have come to us or know what we discussed.
At our first meeting, we will begin to assess your potential lawsuit. If you are still employed or you have already left your employment, certain considerations and strategies need to be given to your particular circumstances. These considerations will be vetted to determine the best course of action. In almost all cases, we will need supporting documentation of your claims. At our first meeting, we will want as much documentation as you can bring to us. This will help us better understand and assess your case. Our meetings are generally long. We try to be meticulously thorough and if we need more information, we will outline what additional materials we may need to help bolster your case. We will research the issues that may arise from your particular circumstances and discuss with you the various causes of actions available. After the first meeting or in some circumstances several meetings, we will be in a position to determine whether you have a viable case.
If we decide to proceed, then you will be asked to sign a retainer agreement so that we may officially represent you and begin the next stage of the process. Our retainer agreements are based on a contingency basis, which means we do not charge you an attorney fee unless we are successful in recovering on your claim.
Once an agreement is in place for us to represent you, we will draft a Complaint and a detailed disclosure statement to be filed in the appropriate court(s). The Complaint will be filed under seal. This means that no one will know the existence of the lawsuit. The Complaint will then be served on the appropriate governmental offices and an investigation will be opened by the government. The government will have a right to join in your lawsuit after they have fully investigated the claims. Meetings will be held with the various governmental agencies who will be investigating the claims. You and our law firm will be present at some of these meetings to discuss with the various officials the extent and depth of your knowledge, and to help the government further investigate the claim. It is imperative that you have experienced attorneys who know how to present your case to ensure the government will be interested and desirous of committing their resources for an investigation. The government has vast resources to supply in the investigation. Depending on the type of fraudulent scheme involved, the government may have one or more investigative agents from the Department of Defense, Department of Justice, Department of Human Health Services, the FBI and others all involved in your case. They have subpoena power to obtain additional information to support your claim. Your help in developing what to subpoena is invaluable. Your case will remain under seal during this process until it is determined that the seal needs to be either partially or fully lifted.
At some point in time, the government will decide whether it is going to intervene and join in your case. If this is done, then efforts will then be made to seek a settlement from the offending company and/or individuals responsible for the fraud. A settlement may be reached after a discussion with all involved. If it is, you as the relator will be entitled to a share of the settlement. Generally, your share of the settlement will depend on certain factors that the government will assess. By statute, you are entitled to receive between 15%-30% of the settlement proceeds. If the government intervenes and the matter is settled or won at trial, then your reward would range between 15% and 25%. In most cases, if a matter is settled, the relator will receive between 15%-20%. If the government does not intervene and we pursue the matter to trial, your recovery could be between 25% and 30%.
If the government intervenes and a settlement is not accomplished, the Complaint will be unsealed and served on the Defendant. The matter will then proceed to trial. At this point, further discovery is developed, depositions of material witnesses are taken and further settlement attempts may be initiated. If no settlement is reached, a jury trial will result.
There may be circumstances where the government determines it is not going to intervene in your case initially. Nevertheless, we have the option to proceed forward to trial without the government. The same procedures for going to trial will apply. The government may intervene at a later date even though initially decided not to do so. Regardless, if no settlement is procured during this time, a jury trial will result.
WHAT KIND OF SCHEMES ARE COVERED BY THE FCA?
There are a multitude of schemes that are used to defraud the government. In fact, the different variety of schemes are only limited by the imaginations of the companies who cheat. The industries that have been most culpable are the Defense Industry, the Health Care Industry and the Pharmaceutical Industry. They account for most of violations where big rewards have been involved. But there are countless other industries and individuals who regularly deal with state and federal governments and who line their own pockets while cheating the governments of our tax dollars. Here are just a few examples:
1. Pharmaceutical Companies
-Illegal marketing by pharmaceutical companies of off label uses for drugs.
-Failing to manufacture drugs in conformance with contractual or regulatory standards.
-Providing kickbacks to physicians or hospitals for prescribing certain drugs.
-Inflating the price of pharmaceuticals
2. Defense Companies
-Selling the government substandard products that don’t conform to the contracted specifications.
-Untruthful disclosure of relevant cost information
-Failure to test or inspect products
-Iraq and Afghanistan Reconstruction Fraud.
3. Hospital and physicians
-Bundling and unbundling medical procedures in order to obtain higher reimbursement than would normally be allowed by the government.
-Billing for services that are not performed.
-Obtaining kickbacks to obtain referrals.
-Furnishing medically unnecessary services.
-Upcoding the services
4. Other Industries/Companies
-Submitting false custom declarations and false invoices on shipments.
-False submissions regarding home mortgage qualifications.
-Proprietary vocational schools falsely submitting student qualifications, enrollment or services provided.
WHAT ARE THE PENALTIES IMPOSED FOR CHEATING THE GOVERNMENT?
The government is entitled to recover substantial penalties for violation of the FCA. Each violation allows the government to recover “a civil penalty of not less than $5,500 and not more than $11,000 plus 3 times the amount of damages which the government sustains because of the act of that person”. (31 U.S.C. § 3729 (a) ). The $5,500-$11,000 civil penalty itself can grow to a significant amount as every false invoice or submission to the Government is a separate act. The combination of that penalty along with the treble damages can translate to tens of millions of dollars in recovery to the government. The larger the government’s recovery, the larger your reward will be.
HOW IMPORTANT IS IT TO BE THE FIRST TO FILE A QUI TAM ACTION?
It means everything. The False Claims Act rewards only the first relator to file. The statute specifies that “When a person brings an action under this subsection, no person other than the government may intervene or bring a related action based on the facts underlying the pending action.” ( 31 U.S.C. § 3730(b)(5)). Therefore, if you want to collect your reward, it is imperative that you be first to file your lawsuit. As a corollary to this point, it is equally as important that you do not advise anyone, other than your attorney, about your thoughts or intentions to pursue a FCA claim as you may be inadvertently tipping off someone who could beat you in the race to the courthouse steps.
WHAT PROTECTIONS DO I HAVE IF I AM CURRENTLY EMPLOYED OR IF I AM FIRED BECAUSE I HAVE COMPLAINED ABOUT MY COMPANY VIOLATING THE FALSE CLAIM ACT?
The FCA provides full protection to whistleblowers against retaliatory actions taken by bullying companies. Those protected are not just the employees who come forward but include independent contractors and agents of that company. It further provides protection to you from whistleblowers’ acts by others associated with you. Protection includes “reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees”. ( 31 U.S.C. § 3730(h) ).