False Claims Act lawsuits and the whistleblowers who share in recoveries

2013 was a strong year for the U.S. Department of Justice, recovering $3.8 billion in fraud cases.

2013 was a strong year for the U.S. Department of Justice, recovering $3.8 billion in fraud cases.

The False Claims Act[i] is the federal law used to prosecute those who make fraudulent claims for payment through government programs. The majority of false claims are made by government contractors engaged in work connected with government spending programs such as health care and military programs. Also referred to as the “Lincoln Law” the False Claims Act is known for its whistleblower provisions. A private citizen may file lawsuits on behalf of the government when the person or entity improperly receives or avoids making payment to the government. An example is knowingly submitting false claims for payment. Submitting false records to back up a bogus claim is another typical violation of the Act.

Whistleblowers are rewarded by a percentage of the amount recovered in a successful lawsuit.

“Qui tam[ii]” laws allow citizens to sue on behalf of governments and be paid a percentage of the recovery, often in the range of 15 to 25%. There was a case in Illinois involving Medicaid processing fraud. The downstate town of Energy, Illinois was in the national news when a doctor plead guilty for various charges in connection with his three clinics. Click/tap here to read the FBI press release, “Doctor from Energy, Illinois Pleads Guilty to Charges of Obstruction of Justice, Tampering with a Witness, and Illegal Dispensation of Methadone Doctor’s Three Corporations Plead to Charges of Conspiracy and Healthcare Fraud.” In 1989, the Whistleblower Protection Act[iii] became law and offered protection to private individuals who report misconduct. The whistleblower is safe from retaliatory action by the accused person(s) and organization(s). With this protection and the qui tam laws, the people who report wrongdoing are rewarded for their effort in saving American taxpayers from fraud.

2013 was a strong year for the U.S. Department of Justice, recovering $3.8 billion in fraud cases.

Plaintiff’s attorneys representing qui tam litigants filed civil lawsuits resulting in judgments to recover the $3.8 billion, the largest amount on record, second only to the 2012 recoveries totaling close to $5 billion. ““It has been another banner year for civil fraud recoveries, but more importantly, it has been a great year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts,” said Assistant Attorney General Delery.[iv]” If you consider the rewards to whistleblowers, at a conservative rate of 20%, would total $760 million in shared recoveries. The DOJ press release states that the government’s success in prosecuting False Claim Act cases is a strong deterrent to anyone who might consider misappropriating public funds.

Would you blow the whistle if you discovered you had personal knowledge of frauds being perpetrated on the U.S. government? Fraudulent claims activity might not be immediately apparent. Sometimes things just do not seem right. What if you file a lawsuit and you are wrong? Whistleblower protections are not conditioned upon a successful lawsuit and if an investigation turns up no wrongdoing, the whistleblower who acted in good faith will be protected against retaliation. If you or someone you know believes frauds are being committed then it is best to contact a lawyer who is experienced in False Claims Act cases and who will be able to advise and represent the whistleblower client.

Michael V. Favia is experienced in complex litigation involving government contract and similar types of fraud. Mr. Favia’s extensive health care law and litigation career allows him and a skilled group of associate colleagues the benefit of experience in representing clients with qui tam claims for violations of the False Claim Act. Michael V. Favia & Associates are available to help and meet for client consultations with offices conveniently located in the Chicago Loop, Northwest side and suburbs so you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates’ professional licensing work, please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter.


[i] U.S. Department of Justice publication: The False Claims Act: A Primer

[ii] Law.com legal dictionary: qui tam action.

[iii] CRS Report for Congress: The Whistleblower Protection Act: An Overview. Mar. 12, 2007.

[iv] U.S. Department of Justice: Justice Department Recovers $3.8 Billion from False Claims Act Cases in Fiscal Year 2013. Press release, Dec. 20, 2013.

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