The Federal False Claims Act ("fca") For Whistleblower & Qui Tam Fraud Plaintiffs & Relators

Highlights of the Federal False Claims Act ("FCA") for Whistleblower & Qui Tam Fraud Plaintiffs, Relators & their Lawyers/Attorneys/Law Firms By Attorney Joseph P. Griffith, Jr. A suit under the federal False Claims Act (FCA), also known as a “qui tam” action, allows people who have insider information of fraud against the Government, known as a “relator” or “whistleblower,” to file a suit to help stop the perpetrators from defrauding the United States Government. The False Claims Act seeks to deter fraud against the United States Government by providing for penalties of up to three times the amount of the fraud in addition to fines of $5,000 to $11,000 per violation. It is estimated that the United States has collected almost $8 billion in fines and penalties in False Claims Act cases since 1986. The FCA is codified as 31 United States Code Sections 3729 - 3732. It is critical that the whistleblower come forward with his information as soon as possible. The False Claims Act requires that the relator be an “original source” of the information, which generally means that he has direct and independent knowledge of the fraudulent conduct and he has voluntarily provided this information to the Government before filing the qui tam suit. Information about fraudulent conduct which is in the public domain prior to the time the whistleblower reports the same to the Government generally precludes the prosecution of a qui tam suit. If the qui tam suit alleging false claims is successful, the whistleblower or relator will also be entitled to 15-30% of the government's total recovery, which includes damages for the false claims, treble damages, plus civil penalties of from $5,000 to $10,000 per false claim. To recover this bounty, the relator must have complied with the complex and unusual statutory requirements, however. Merely providing information to a hotline will not entitle the relator to a recovery under the False Claims Act. 31 U.S.C.A. § 3729, entitled “False Claims,” provides as follows: (a) Liability for certain acts.--Any person who-- (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; (3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid; (4) has possession, custody, or control of property or money used, or to be used, by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;(5) authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true; (6) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge the property; or (7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government, is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person.... Unlike most other lawsuits, a complaint under the False Claims Act must be served upon the government but must not be served on the defendant until ordered by the

court, must be filed under seal, and must be supported by a detailed disclosure memorandum, not filed in court, but served on the government, setting forth the factual underpinnings of the complaint, together with copies of all relevant documents. The attorney for the plaintiff/relator to discuss the case or to disclose its existence to anyone, including the defendant and the media, as to do so could impair the government's ability to investigate the allegations in secret. A whistleblower or qui tam plaintiff's failure to follow these unique statutory requirements of the False Claims Act (FCA) can result in dismissal of the action. After the complaint is filed under seal, and a disclosure memorandum and related documents are served on the government, the government has 60 days to intervene or decline to intervene, move for an extension of time to determine whether to intervene, seek dismissal of the action, or settle the case per §3730(b)(4). The government will usually request numerous extensions of the 60-day initial investigatory period, however, as 60 days typically is too short a time period for the government to complete an investigation. Upon completion of its investigation, the government has the option to take over, or intervene in, the case. Regardless of whether the government intervenes, the relator or whistleblower who has complied with the proper procedures and is not otherwise barred from recovery, is still entitled to a share of the recovery, and may pursue the case on behalf of the government. The statute of limitations for an FCA qui tam/whisltleblower action is found in Title 31, Section 3731(b) of the United States Code.“A civil action under section 3730 may not be brought—(1) more than 6 years after the date on which the violation of section 3729 is committed, or (2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.” In determining which limitations period applies to an FCA action, courts examine the time at which either the relator or the Government became aware or knew of the violation. The qui tam or whistleblower plaintiff should contact an experienced FCA litigation attorney. Few attorneys handle qui tam or False Claims Act whistleblower cases on a regular basis. Contacting a former Assistant U.S. Attorney or U.S. Department of Justice fraud litigator is highly recommended. Joseph P. Griffith, Jr., Esquire Joe Griffith Law Firm, LLC 7 State Street Charleston, South Carolina (SC) 29401 (843) 225-5563 (tel) (843) 722-6254 (fax) www.joegriffith.com www.joegriffith.com/qui-tam-whistleblower-claims.html Attorney Joseph Griffith is a former prosecutor for the U.S. Department of Justice who focuses on qui tam/whistleblower law suits.