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Whistleblower cases

A whistleblowing case, or “qui-tam” case, is a lawsuit against individuals or companies that have had some role in defrauding the federal government and American taxpayers. Through these lawsuits, our firm uses a whistleblower’s unique knowledge about fraud to recover the government’s losses on the government’s behalf. The whistleblower, usually a person with inside knowledge of the fraud, is entitled to a reward between 15 and 30% of the total recovery if the case is successful.

The False Claims Act allows people to file on behalf of the state or federal government. This act is one of the most effective tools in fighting Medicare and Medicaid fraud, as well as defense-contractor fraud and other types of fraud perpetrated against the federal government, as it provides an incentive for people to step forward on the government’s behalf.

Through False Claims Act litigation, the US government has recovered nearly $22 billion dollars between 1987 and 2008. Whistleblowers serve an invaluable role in helping our government uncover fraud and prosecute those committing it. We are here to help.

What is the False Claims Act (Qui tam)?

The False Claims Act is 31 U.S.C. Sections 3729 through 3733. Qui tam, under the False Claims Act, allows persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States Government. In Qui tam actions, the government has the right to intervene and join the action. If the government declines, the private plaintiff may proceed on his or her own. Some states have passed similar laws concerning fraud in state government contracts.

What actions are considered violations under the False Claims Act?

  • Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment;
  • Knowingly using (or causing to be used) a false record or statement to get a claim paid by the federal government;
  • Conspiring with others to get a false or fraudulent claim paid by the federal government;
  • Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.

These represent only a few of the types of fraud that can be the basis for a successful whistleblower claim. Read below for more specific types of violations.

Who can file a Qui Tam Action?

Any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit. If the government or a private party has already filed a False Claims Act lawsuit based on the same evidence as you, you cannot bring a lawsuit. You must be the first to report, or there is no reward for disclosure of the fraud.

Where should a whistleblower case be filed?

Whistleblower litigation must be confidentially filed under seal in federal district court in accordance with the Federal Rules of Civil Procedure. A copy of the complaint, with a written disclosure statement of substantially all material evidence and information in the plaintiff’s possession, must be confidentially served on the US Attorney General and the US Attorney for the district in which the complaint is brought. An action under the False Claims Act must be filed, in camera and under seal. The complaint and its contents must be kept confidential until the seal is lifted. The complaint is not served on the defendant. If the plaintiff violates the provisions of the seal, his or her complaint could be dismissed.

How do you file a False Claims Act lawsuit?

The first step in a successful FCA case is finding the right lawyer, and filing the case. If you disclose the fraud to anyone before doing so, you may destroy the case. The whistleblower or “relator” files the lawsuit in federal court “under seal;” in other words, it is not available to the public and cannot be discussed with anyone except the government officials investigating the case. Even the defendants — the individual or organization committing fraud — are not told about the lawsuit. This gives the government time to investigate the fraud allegations without alerting the defendant. The seal initially lasts for 60 days, but seals on qui tam cases are routinely extended for one or two years or even longer while the government investigates.

At the end of the sealed investigative period, the government decides whether to join the qui tam lawsuit. If so, the litigation is conducted by the government and the whistleblower’s attorney, with the government as lead counsel on the case. If the government declines to intervene, the relator (and his / her law firm) may go forward with the lawsuit and assumes primary responsibility for running the case.

The timing of a lawsuit can be critical. The first person to file a case under the False Claims Act for a particular fraud preempts all other cases; in other words, if another person with insider information blows the whistle first, the second whistleblower typically gets nothing.

Potential whistleblowers also should keep in mind that the False Claims Act has a statute of limitations that may prohibit you from taking a course of action if the report is delayed. So, it is best to contact a firm immediately. If you are concerned that your case is too old, contact us to discuss the details.

What happens to the defendant?

According to qui-tam laws, solvent defendants typically pay three times the government’s losses, plus a fine for each false claim ($5,000-$10,000 per claim). When settling a case, the government often agrees to forego the civil penalties and accepts two to three times the amount of damages suffered by the government. The defendant also must pay the fees and the case-related expenses of the whistleblower’s attorney.

What is the whistleblower’s reward?

Under the False Claims Act, whistleblowers are entitled to 15-30% of whatever amount the government recovers as a result of their lawsuit. The final percentage amount depends on whether the government intervened in the qui tam case, as well as other factors about the types of laws used, and the case itself. If the fraud is large, so are the rewards. As one example, former Pfizer sales representative John Kopchinski was paid $51.5 million when the government recovered $2.3 Billion in civil and criminal penalties against Pfizer for the improper marketing and sale of the drug Bextra. While every case is different, it demonstrates the incentive program instituted to help the government uncover fraud.

Congress decided to give whistleblowers a share of the recoveries that result from qui tam lawsuits to give people a strong incentive to step forward and take the personal and professional risks involved in reporting fraud. It also wanted to encourage private law firms to risk their resources in litigating cases on the public’s behalf.

To be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough. Informing the government without filing the lawsuit, may also destroy your case. You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.

Medicare and Medicaid fraud

DeShaw Trial Lawyers represent whistleblowers who are helping stop fraud against federal and state government programs such as Medicare, and Medicaid.

Government Contractor fraud

DeShaw Trial Lawyers are also investigating FEMA disaster relief contract fraud, Iraq reconstruction contracts, and other issues which we cannot disclose at this time. The whistleblowers can receive a substantial part of the funds recovered by the government if the cases are successful.

What about Tax Fraud?

In 2006, Congress amended the Internal Revenue Code to permit whistleblowers to obtain a reward for reporting tax fraud. Through qui tam lawsuits, whistleblowers may recover the government’s losses on the government’s behalf.

One type of tax fraud that is being pursued, is the intentional misclassification of employees as independent contractors, in large national and international businesses. An example of this type of case is a finding by the IRS that FedEx has improperly classified drivers as independent contractors, thereby underpaying taxes. This is also an area where we represent clients nationally.

Who can be a whistleblower?

Many people who file qui tam lawsuits (called the “relators”) are employees or former employees of companies that commit fraud; however, anyone who knows of an instance where the government has paid false claims can file a qui-tam lawsuit: a competitor, a customer, a subcontractor or even a patient.

What are the whistleblower protection provisions in the False Claims Act?

Under Section 3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the False Claims Act is entitled to all relief necessary to make the employee whole. Such relief may include reinstatement as well as double back pay and compensation for litigation costs and attorneys’ fees. So, there are penalties for retaliation.

The scope of whistleblower protection under Section 3730(h) is an issue that currently divides the courts. Many states have wrongful discharge or other employment laws that may provide other remedies for such retaliation.The Statute of Limitation for filing a FCA retaliation case is different then that for filing a qui tam recovery case. You must check with us to determine what that is in your state.

What about state False Claims Acts?

Due to the success of the Federal False Claims Act, a growing number of states have enacted State versions of the False Claims Act. These laws permit whistleblowers to recover a “finders’ fee” for reporting fraud in state, local, and municipal contracting. Contact us to see if your state currently has a False-Claims Act provision.

How can I get help?

For more information, please contact us or call our office at 866.THE.FIRM (843.3476) for a free consultation.

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DeShaw Trial Lawyers 2350 NW York St, Portland, OR 97210
Phone: (503) 227-1233 | Toll Free: (866) 843-3476 (866-THE-FIRM)