Federal False Claims Act

whistleblower-tree2The US False Claims Act allows a whistleblower to file a complaint in federal court under seal, which means the whistleblower’s allegations are not shared with the defendant until the government gets an opportunity to investigate the complaint.

If deemed meritorious, the government has the option of intervening in the whistleblower’s litigation, taking over leadership of the lawsuit.  The government can also decline involvement in the case, allowing the whistleblower to litigate the matter on his or her own or withdraw the lawsuit.

If the defendant is found to have improperly taken money from the government, the whistleblower receives a percentage of the recovery, as well as getting his or her attorneys’ fees paid by the defendant.  If the defendant committed fraud to avoid an obligation to pay the government or refund money to the government, that is also covered under the law.

False claims acts have some limitations.  The federal False Claims Act excludes tax violations, although there are other legal venues for these whistleblowers (see our page  “Tax Fraud Programs”).  The law encourages whistleblowers to file promptly through a “first to file” jurisdictional bar. This first to file bar means the court must dismiss complaints if the allegations have already been reported by another whistleblower.

All qui tam claims, including those made under the federal False Claims Act, constitute a specialized area of legal practice.  If you have a claim, please call us at Stengle Law for a free consultation about your case.

History

whistleblower-tree2False claims acts enjoy a long history.  The first recorded false claim act appeared in 635 A.D. when King Wihtred of Kent announced a qui tam provision through which one could report another for violating the King’s prohibition against work on the Sabbath.  Wihtred’s provision awarded the whistleblower a portion of the fine and the profit from the wrongdoer’s labor.