False Claims (Qui Tam)

The False Claims Act (FCA) is important legislation that protects relators (whistleblowers). The FCA allows these individuals to file lawsuits in the name of the government against people or businesses that defraud the State or Federal Government.

Whistleblower lawsuits are also called ‘qui tam’ actions from the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur” which means “[he] who sues in this matter for the king as well as for himself.” Qui tam bounties for people who come forward can be significant – up to 30% of the amount recovered for the government. The penalties for filing a fraudulent claim can be severe. Consulting a False Claims Act attorney before a commencing a qui tam action is strongly recommended.

Violations of the False Claims Act are most commonly encountered in the healthcare industry (including drug companies, hospitals, pharmacies, laboratories, and physicians). It is also used for civil remedy to redress government contract abuses and procurement related spending. This section will quickly outline what is considered a violation of the Federal False Claims Act.

Elements of a False Claim Case

There are two key elements for liability in an FCA action are that the act is against the Government and it is knowingly perpetrated.

The fraud needs to be perpetrated against the Federal government, State government or government agency. An example would be a defense contractor billing the U.S. Army for rifles they knew were non-functional.

The perpetrator must knowingly commit or be deliberately ignorant of the fraudulent action. An example is a doctor knowingly intentionally billing Medicare or Medicaid for unnecessary services or services never provided.

Types of Claims

  • Receipt of Payment: The most prevalent type of FCA violation is payment to a person, company or other entity that is directly or indirectly responsible for defrauding the Government.
  • Avoidance of Payment: Also known as reverse false claims. Instead of getting paid by the Government these persons or businesses are intentionally not paying or providing services or property owed to the Government.
  • Conspiring with Others: This portion of the FCA allows liability to be placed on any person or entity who intentionally conspires with others to defraud the government.
  • Submission of a False Claim For an FCA violation to exist payment or avoidance of payment is not necessary. Submitting to the government false statements or false records for payment is enough to establish liability.

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