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The False Claims Act and Qui Tam Actions

Orlando Employment Attorney Helps Employees with Qui Tam Actions

The False Claims Act, also known as the "Lincoln Law," was enacted during the Civil War to combat fraud perpetrated by companies that sold supplies to the Union Army. During the Civil War many companies defrauded the U.S. government by selling inferior or defective materials. For instance, many companies mixed sawdust with gunpowder and billed the U.S. government for the "gunpowder." In order to protect the government from fraudulent billing charges President Abraham Lincoln and the Congress enacted the False Claims Act, codified in 31 U.S. C. Section 3729-3733.

Orlando Qui Tam AttorneyWhen the False Claims Act was created the U.S. government did not have the resources needed to investigate such fraudulent practices. As such, it created an incentive for private citizens to report their employers to the government which is known as the "qui tam" provision. This provision allows private citizens with evidence of fraud against federal programs or contracts to sue on behalf of the government and be paid a percentage of the recovery. "Qui tam" is a Latin phrase which loosely translates to "he who brings an action for the king as well as for himself." The private citizen who brings a qui tam action on behalf of the government is usually called a "whistleblower" because he or she has "blown the whistle" on his or her employer. Once a qui tam action is filed in court the False Claims Act states that the qui tam case will be sealed for 60 days during which time the government will investigate the whistleblower's allegations. After its investigation, the government has the right to intervene and join the action brought by the private citizen. If the government declines to intervene in the action the whistleblower, or qui tam relator, can proceed with the lawsuit on his or her own.

Violations of the False Claims Act include:

  • 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.

Some common types of fraud against the government include health care fraud, including Medicare and Medicaid fraud, defense contractor fraud, and fraud in the financial industry. A common example of healthcare fraud involves billing Medicare and Medicaid for services which were never rendered to a patient as well as overbilling, or upcoding, in order to reflect a more expensive procedure than was actually performed on the patient.

In order to bring a successful claim under the False Claims Act, a whistleblower must prove three elements: (1) a false or fraudulent claim; (2) which was presented, or caused to be presented, by the defendant to the United States for payment or approval; (3) with the knowledge that the claim was false. United States v. R&F Props. of Lake Cnty., Inc., 433 F.3d 1349, 1355 (11th Cir. 2005). While the False Claims Act imposes liability only when the defendant acts "knowingly," it does not require that the person submitting the claim to have actual knowledge that the claim is false. A person who acts in reckless disregard or in deliberate ignorance of the truth or falsity of the information can also be found liable under the False Claims Act.  31 U.S.C. §3729(b).

Violators of the False Claims Act are liable for 3 times the amount of damages for which the government sustains because of the defendant's fraud as well as civil penalties ranging from $5,500.00 to $11,000.00 for each of the false claims. 31 U.S.C. §3729(a)(1); 28 C.F.R. §85.3(a)(9)). Section 3730(d)(1) of the False Claims Act provides, with some exceptions, that a qui tam relator, when the government has intervened in the lawsuit, shall receive at least 15 percent but not more than 25 percent of the proceeds of the False Claims Act action depending upon the extent to which the whistleblower substantially contributed to the prosecution of the action. When the government does not intervene, section 3730(d)(2) provides that the whistleblower shall receive an amount that the court decides is reasonable and shall not be less than 25 percent and not more than 30 percent.

The False Claims Act also provides protection to whistleblowers who are retaliated against as a result of bringing an action under the False Claims Act. 31 U.S.C. §3730(h). Such protections include reinstatement, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the retaliation, including costs and reasonable attorney's fees.

In addition to the federal False Claims Act, Florida has a similar provision called the "Florida False Claims Act." Chapter 68.081, et seq., Florida Statutes. Like the federal False Claims Act, the Florida False Claims Act allows a private citizen to bring a qui tam action in the name of the State of Florida. The provisions of the Florida False Claims Act makes it illegal to knowingly present or cause to be presented a false or fraudulent claim for payment or approval to the State of Florida, among other fraudulent activities. Violations of the Florida False Claims Act result in a civil penalty of not less than $5,500.00 and not more than $11,000.00 and for triple the amount of damages the State of Florida sustains because of the fraudulent claim(s) for payment. A whistleblower who brings a claim on behalf of the State of Florida is entitled to receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action. The whistleblower will also be entitled to his or her reasonable attorney's fees and costs.

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Whistleblowers are extremely valuable to the government because they have inside information that the government does not have. As such, the federal and Florida False Claims Act highly incentivize private citizens to come forward and "blow the whistle" on their employers' fraudulent activities. If you are aware of fraudulent activities being perpetrated against the government call the Orlando business and employment attorneys at J. Allen Law P.L. who will fully advise you of your rights as a whistleblower. You can reach us at (407) 205-2330 or fill out the online form provided on this page and we will contact you shortly. Your privacy is important to us and we will keep your information confidential.

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