Frequently Asked Questions About The False Claims Act
The False Claims Act (FCA) is a federal law that in recent years has been robustly enforced in Texas and nationwide – largely as a result of the law’s whistleblower provisions.
At Hilder & Associates, P.C., we have a record of success in representing whistleblowers with FCA claims. If you would like to know more about rights and protections afforded to whistleblowers, contact our Houston law firm.
What is a qui tam lawsuit?
The legal term “qui tam” refers to taking action on the government’s behalf. Under the FCA, a private individual or entity – the whistleblower – can sue another party for defrauding the federal government, and qui tam lawsuits have helped the U.S. Treasury recover billions of dollars in recent years.
When an individual brings a qui tam lawsuit, the government may choose to investigate the fraud allegations and join the action. If the government joins, then the civil litigation is handled jointly by the government and the whistleblower’s attorney.
Under the FCA, qui tam cases generally remain sealed for 60 days while the government investigates, although the government may extend the seal to accommodate a lengthier investigation. In many cases, these investigations last a year or longer.
After the investigation, if the government chooses not to intervene, the whistleblower may still proceed with the case and seek to prove that the government was defrauded.
Why is the False Claims Act so effective?
The FCA has proven effective largely because whistleblowers – “relators” in legal terms – stand to receive substantial rewards for blowing the whistle on fraud.
If the government joins the lawsuit, the relator may be eligible to receive 15 to 25% of the amount recovered by the government. If the government declines to join the suit, the relator may be eligible to receive between 15 and 30% of the recovery.
Additionally, an individual or entity found to be in violation of the FCA is liable for three times the amount the government was defrauded. A violator may also be subject to penalties of $5,500 to $11,000 for each false claim.
Can subsequent whistleblowers collect a reward after reporting the same fraud?
If an individual or the government has already filed an FCA lawsuit based on the evidence you possess, you cannot file your own lawsuit. In other words, to be eligible for a reward under the FCA, you must be the first to report the fraud.
What kinds of fraud does the FCA cover?
FCA violations can occur in a variety of scenarios, but, generally, the FCA covers federally funded programs and contracts. Examples of FCA violations include:
- Health care fraud, such as billing Medicare for unnecessary services or services not rendered
- Contractor fraud, such as falsifying information about the cost and quality of products and services sold to the government
- Pharmaceutical fraud, such as “off-label” marketing of a drug for a use not approved by the Food and Drug Administration
Note: The FCA does not cover tax fraud or securities fraud. Tax fraud claims and rewards are covered by the Tax Relief and Health Care Act, and securities fraud claims are covered by the Dodd-Frank Act and the Foreign Corrupt Practices Act.
Contact Hilder & Associates, P.C.
Bringing a qui tam claim under the False Claims Act is a complicated matter requiring advice and representation from an experienced whistleblower attorney. To discuss your whistleblower case, contact our Houston office at 713-234-1416 or toll-free at 888-659-8742.