Each year, the United States Department of Justice recovers billions of dollars from companies that have defrauded the federal government or engaged in other corrupt or illegal activities that cheat taxpayers. Most of those funds are recovered in cases filed by “whistleblowers” – brave private citizens who speak up when they become aware of fraud at their workplaces or elsewhere. Youman & Caputo’s whistleblower team has extensive experience both within the government as former Department of Justice lawyers handling False Claims Act cases and in representing whistleblowers with knowledge of government fraud.
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Most Private Companies Interact With the Federal Government
What Does the False Claims Act Prohibit?
Complexities of Qui Tam False Claims Act Cases
Process of a Qui Tam False Claims Act Case
Litigating a Declined Qui Tam False Claims Act Case
What is the Applicable Statute of Limitations?
Potential Rewards Available
How Does the False Claims Act Protect Against Retaliation?
Our Track Record of Success in Whistleblower Cases
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The federal government is one of the largest purchasers of goods and services in the world, and tens of thousands of businesses have contracts to provide them to the government. Additionally, many sectors of the economy, such as healthcare, involve government payments or reimbursements under vast and complex regulatory schemes.
With billions of dollars annually flowing from by the federal government, the opportunities for graft, fraud, and corruption are almost limitless. So, too, are the ways in which such conduct can lead to meritorious lawsuits under the False Claims Act.
If a whistleblower’s False Claims Act lawsuit (also called a qui tam suit) results in a settlement or judgment in the government’s favor, the whistleblower is entitled to receive a percentage of the government’s recovery – in some cases, up to 30 percent.
The False Claims Act creates incentives for individuals to report fraud being committed against the government. The False Claims Act was enacted to create a right of action against individuals and corporations engaged in various forms of fraud and illegal activities resulting in financial losses to the federal government. The FCA prohibits private individuals and entities from making false or fraudulent claims to the federal government.
Specifically, the False Claims Act prohibits the following actions:
The term “knowingly” has a broad definition under the False Claims Act. Knowledge can be proven for the purposes of an FCA case if the individual had 1) actual knowledge of the information, 2) acted with deliberate ignorance of whether the information was true or false, or 3) acted in a reckless disregard of the truth or falsity of the information. These rules extend to claims submitted to all federal programs, including Medicare and Medicaid.
Qui tam False Claims Act litigation is a highly specialized and complex area of the law, with unique procedural requirements and numerous potential roadblocks and pitfalls. In addition to the legal challenges, these actions may involve significant personal risks to the whistleblower’s current job and future employment opportunities.
At Youman & Caputo, our qui tam attorneys have extensive experience successfully representing whistleblowers in claims including:
A qui tam False Claims Act case is a specific type of lawsuit that is permitted under the FCA, where a whistleblower or “relator” brings a suit on behalf of the government to recover funds that were gained or obtained through fraud. The whistleblower or relator is the plaintiff who files the lawsuit seeking to recover damages on the government’s behalf. This is a highly specialized type of claim and individuals considering becoming a whistleblower should find a skilled lawyer with significant experience navigating qui tam case procedures.
After you contact a qui tam False Claims Act attorney, he or she will conduct a thorough interview to gain a full understanding of your fraud allegations. If your attorney believes that you have sufficient evidence of fraud resulting in significant financial losses to the government, the next formal procedural step is to draft a disclosure statement, or a written document that the FCA requires to be submitted to the government before filing a lawsuit.
The disclosure statement provides all material evidence and information that the whistleblower possesses to prove the fraud. The disclosure statement should include every significant document, piece of information and detail that the relator has in his or her possession. The statement will be shared with the government but generally remains confidential, meaning it does not become part of public record.
The complaint is the pleading that will be filed with the court to initiate a qui tam False Claims Act lawsuit. The complaint will contain much of the same information as the disclosure statement, but (once it is unsealed) it will be a matter of public record, meaning it should not contain information that you do not want to remain confidential (like patient names). The complaint must plead the essential elements of an FCA claim and also satisfy other legal requirements, such as alleging jurisdiction and venue.
In a qui tam lawsuit, the relator is the party that files a lawsuit on behalf of the government, but the government is the “real party in interest.” A qui tam case must be filed under seal, meaning only the relator and his or her lawyer, the government and the court will know of the claim’s existence.
The government then has a seal period of 60 days (which the court can extend upon a showing of good cause by the government) to investigate the complaint and decide if it wishes to intervene in (or join) the lawsuit. Only once the seal period ends will the lawsuit become unsealed and a matter of public record. In addition, while the case is under seal, the government will not reveal the existence of the lawsuit to the defendant unless and until the court permits the disclosure and the government, in its discretion, believes that its investigation will not harmed by disclosing the existence of the case. This reduces the risk that the defendant will destroy or fabricate evidence in advance of legal action. In many cases, government investigations of qui tam claims can take two to three years or longer.
Once the government completes its investigation, it will decide whether or not to intervene in the lawsuit. If it chooses to intervene, the court will unseal the complaint and the defendant will be served with a copy of the qui tam False Claims Act lawsuit. If the government decides to intervene, lawyers from the United States Department of Justice (DOJ) will litigate the case, but the relator will partner with the government in that effort. The relator’s attorney will work closely with the government to litigate the case, but the government will have the right to settle the case without the relator’s involvement. If the government does not intervene, the attorney representing the whistleblower can choose to proceed with litigation.
The government might decide not to intervene with a qui tam False Claims Act lawsuit for many reasons. Often the decision is a matter of government resources – the government simply does not have the lawyer or agency resources to devote to litigating the case. Sometimes the government decides that there was not enough evidence to prove the case or that the facts did not amount to a False Claims Act violation. The government may also decline to intervene if the damages are too small or the violation is not serious enough to warrant government intervention.
If the government declines to intervene, the relator can still proceed on behalf of the government and litigate the case after the complaint is unsealed. The relator’s attorney will serve the complaint on the defendant to initiate the lawsuit. The first phase is often a motion by the defendant seeking to dismiss the case. Assuming that motion is denied by the court, litigation will move into the discovery phase, which allows both sides of the case to gather evidence, depose witnesses and exchange information with each other.
A qui tam False Claims Act lawsuit can reach a settlement at any stage. Both parties may engage in settlement negotiations in an attempt to resolve the legal dispute. If the case goes to trial, both sides will present evidence and the jury will decide if the defendant is liable for an alleged act of fraud. The damages recoverable at trial include up to three times the amount of the government damages plus substantial penalties for each false claim submitted by the defendant to the government.
A statute of limitations, or legal deadline, applies to all qui tam False Claims Act lawsuits. Federal law enacts this filing deadline. The statute of limitations is six years from the date that the act of fraud was committed or three years from the date that the government knew or reasonably should have known about the material facts of the case – whichever is longer. Generally, because of other legal considerations (such as the first-to-file bar), a relator’s best chance of success is to file a lawsuit as quickly as possible and well before the statute of limitations expires.
If the the defendant is found to have violated the False Claims Act in a qui tam case, the defendant will be liable for three times the government’s damages for that violation, plus additional civil penalties. The whistleblower or relator is entitled to receive a percentage of the recovered funds as a reward.
The award percentage can range from 15 to 25 percent of what the government recovers if the government joined the action, or 25 to 30 percent if the government declined to intervene in the action. The exact percentage will depend on factors such as the extent of the information the whistleblower provided and the quality of the relator’s (and relator’s attorney’s) contributions to the case.
The False Claims Act includes provisions against whistleblower retaliation. It protects employees, contractors and agents who engage in protected activities from retaliation by an employer in the form of harassment, discrimination, threats, job loss, demotion or suspension. If an employer or another party attempts to retaliate against a whistleblower for taking lawful action under the FCA, that party could face a retaliation lawsuit.
A claim filed for retaliation under the False Claims Act could result in legal remedies awarded to the victim, including damages to compensate the victim. The defendant may have to reinstate a terminated employee, give the victim back pay for lost wages, pay the victim for emotional distress, and cover any legal fees and costs incurred during legal proceedings for a retaliation lawsuit.
Some of our notable Qui Tam False Claims Act victories:
If you are considering trying to expose corruption and fraud, it is essential to hire lawyers with significant experience in whistleblower cases and who are as committed as you are to holding wrongdoers accountable.
At Youman & Caputo, we have the experience, knowledge, and commitment necessary to protect the rights of whistleblowers and help our clients obtain the maximum compensation available for their courageous actions.
Our False Claims Act attorneys have the utmost respect and admiration for whistleblowers who make the difficult decision to do the right thing in the face of wrongdoing.
If you have questions or concerns about your rights as a whistleblower or want to discuss your potential False Claims Act matter, please contact us to schedule your free consultation.
“I and a partner were represented by David Caputo in a complex, lengthy Qui Tam lawsuit related to Medicaid fraud. David was able through his legal expertise, personal skills, and client commitment to effectively guide us successfully through this complex process resulting in a successful outcome. It was a pleasure to meet and work with David and I would highly recommend him as counsel in Qui Tam lawsuits.”