What is a Qui Tam Action Under the False Claims Act?

The False Claims Act is a federal law that dates back to the American Civil War.  It rewards people who help identify fraud against the government by giving them a percentage of the funds that are recovered by the government. The False Claims Act allows private individuals, also known as whistleblowers or relators, to file suit against an individual or business that the whistleblower knows is defrauding the government. In addition to providing for whistleblower recovery in successful cases, the False Claims Act provides job protection to whistleblowers. One of the most common areas of fraud raised in False Claims Act is health care fraud, including fraud against the Medicare and Medicaid programs. 

When a False Claims Act case is first filed, it is filed under seal, meaning that it is kept secret from everyone other than the government. Initially, not even the defendant will know that a case is filed. While the case is under seal, the government will investigate the case to determine whether it wants to take part in the case—also known as “intervening.”  The government investigates many qui tam False Claims Act whistleblower cases, but only intervenes in fewer than 20%.  Once the government makes the decision whether to intervene, the case will be unsealed and made available to the public. Though a whistleblower case can go forward without the government, cases do better when the government gets involved. For that reason, it is very important that the lawsuit and any supporting documents filed in support of the lawsuit provide detailed evidence of the fraud so that the government understands the nature of the fraud and the evidence that it can use to prove it.

If a defendant is found liable under the False Claims Act, it may have to pay up to three times the government’s losses plus penalties of between $5,500 and $11,000 for each false claim submitted. 

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