The False Claims Act

The Federal Government spends over $6 trillion a year, including over $750 billion on defense, nearly $750 billion on Medicare, and almost $600 billion on Medicaid. Although there is no definitive government estimate of how much of this money is lost to fraud, some organizations estimate that Medicare fraud alone could be $83 billion or more a year. If you work for a company that receives government money and are concerned about potential fraud, you should know about a powerful tool called the False Claims Act or the “FCA.”

The History of the False Claims Act

The False Claims Act dates to the Civil War, when unscrupulous contractors misused federal funds by providing dying donkeys instead of warhorses, sand instead of sugar, and guns that couldn’t shoot. The government couldn’t always spot these fraudsters, so Congress empowered whistleblowers, who were often insiders at these companies and were on the front lines of detecting fraud, to bring lawsuits on behalf of the federal government. Because of its roots in the Civil War, the FCA has sometimes been referred to as the “Lincoln Law.”

Could the FCA Help You?

You might be wondering, "How does this 150-year-old law concern me?"

As the Department of Justice puts it, “the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest.” Since 1986, the FCA’s whistleblower provisions have returned more than $50 billion to the federal treasury.

The FCA remains a valuable tool in the fight against defense contractor fraud, but it’s reach isn’t limited to military spending. As the Supreme Court put it, the FCA reaches “all types of fraud, without qualification, that might result in financial loss to the government.”

The FCA prohibits anyone—whether an individual or a company—from knowingly submitting, or causing someone else to submit false or fraudulent claims for payment to the government. No matter what the situation, the FCA ensures that those who cheat the system are held accountable.

Here are some situations where the FCA could be your ally:

• You've noticed your healthcare employer billing Medicare for services not rendered or for more expensive services than those provided.
• Your defense or government contracting company delivers sub-standard products or charges for phantom services.
• Your educational institution falsifies student records to get more federal aid.
• You observe other misuses of federal funds, from housing assistance to social welfare programs.

In any instances where the federal government’s money is being fraudulently misused, the False Claims Act can be a whistleblower’s most powerful weapon.

The Rewards: A Whistleblower’s Due

Uncovering fraud against the government is not just a moral pursuit; it can also be financially rewarding. Under the False Claims Act, when a whistleblower’s lawsuit is successful, they’re potentially eligible to receive between 15% and 30% of the total recovery. The exact percentage depends on several factors, including whether the government “intervenes”, or takes over the suit; whether the case settles early on or goes all the way to trial; and how much assistance the whistleblower and their legal team provide the government.

Beyond the Monetary: Other Rewards

While the financial rewards can be substantial, many whistleblowers are driven by more than just monetary compensation:

• Peace of Mind: Playing an instrumental role in uncovering fraud and protecting public funds brings a deep sense of moral satisfaction and fulfillment.
• Protecting the Public: Fraud against the government can harm society at large—be it through subpar medical care, inferior defense equipment, or misuse of public funds. By blowing the whistle, you help safeguard your community.
• Setting a Precedent: Whistleblowing can set a precedent within industries, signaling that fraud won’t be tolerated. This can bring about positive change and increased transparency.

Protecting Whistleblowers

Blowing the whistle isn’t a riskless endeavor. As many whistleblowers learn first-hand, the same people and companies willing to defraud the government are also willing to fire their employees if they speak up. Thankfully, the FCA contains protections against retaliation for whistleblowers who engage in protected conduct. For more on the FCA’s anti-retaliation protections, see this article by Outten & Golden’s Whistleblower & Retaliation Practice Group.

If you think you have a whistleblower claim under the False Claims Act – what should you do? Your voice can make a difference, and there's a legal framework to support and reward your courage. Outten & Golden, with its dedicated team and a history of championing whistleblowers' rights, is here to guide you. Our whistleblower and retaliation team, led by Tammy Marzigliano and David Jochnowitz, has the knowledge, experience, and dedication to guide potential whistleblowers through the complex process, ensuring their rights are protected every step of the way. Contact us today, and together we’ll ensure that integrity prevails.

FAQs

1. What constitutes a "knowing" submission of a false claim? 2. What is a “qui tam” lawsuit? 3. Are whistleblowers protected under the law? 4. How much can a whistleblower be rewarded? 5. What if I face retaliation at work?