How did I Discover the Fraud?
Did someone make a false statement to the government for purposes of getting a claim paid, or for purposes of avoiding paying money back to the government?
If so, who made the false statement, to whom, when, where, why, and how?
What government programs or funds are involved?
What is the process that must be followed to obtain the funds?
What regulations or documents exist that describe the process?
What part of the process did the defendant perform in a knowingly false manner?
Much of what makes people angry about government is not actually fraud —but rather waste, incompetence, mismanagement, apathy and similar problems. However, unless someone knowingly made a false statement to the government, there will not be a basis to file suit under the False Claims Act. It is important to describe and help us understand as many of the details about the fraudulent act as possible—the actual false claims, the people involved, the regulations that were violated and the operation of the claim’s process—both at the company and at the government. Journals, memos, documents and notes are very helpful.
Is it possible that anyone within the government knew or approved of the alleged fraud or the improper billings?
Is there any evidence of wrongdoing by the government itself?
If the government was told about the issues now the subject of the fraud allegations and did nothing about it, you may still have the right to file the case. The issues are: who within the government was told, when, what was said, and what happened as a result.
Has anyone done anything to try to cover up this fraud?
Have defendants told the government about it?
A key element of a False Claims case is that someone knowingly did something wrong, not just made a mistake. Few things can be more effective in proving that someone knew what he/she was doing was wrong than making efforts to cover it up.
Can I Document the Fraud?
Other than the defendants and me, who else knows about the fraud?
Where are these people employed?
Were they ever, or are they now, employed by the defendant?
Are they likely to be helpful to, or hostile to, the defendant?
What documents were submitted to the government to obtain payment and what is false about them?
What other documents exist that would help show the fraud, and who has them?
In a Qui Tam case, the more knowledgeable and credible witnesses you can identify, the better. The same is true for documents that show the fraud. Government lawyers will be looking to build a case that does not completely rely on any single witness or document. Corroboration helps persuade the government to intervene and bring all its resources and authority to bear on the case, while at the same time, takes some of the pressure off of you.
Make a “corporate family tree” or organizational chart showing how the entity that committed the fraud is organized, what the different departments are, what their functions are, and who works/worked where.
In order to determine whom to sue, and in order to subpoena the right individuals to produce records, we and the government will need to know as much as possible about the defendant entity, including its business, management, structure, assets, as well as where you or your source of information fits in.
Who was responsible for or involved in the fraud, and what evidence is there to prove it?
Your “gut feeling” is important, and may be helpful in steering us in the right direction, but it isn’t enough to support naming someone as a defendant. Who, in a position of authority at the defendant entity or elsewhere, was knowingly and actively involved in the fraud?
A Qui Tam lawsuit must be more than just a series of general allegations and speculations. It must be as thoroughly verified as possible and very detailed. In addition to a Complaint, you will have to provide a detailed “Written Disclosure” to the Department of Justice, containing all the facts you know. The more details and information you are able to supply, the more likely the government will be persuaded to “intervene” and take over the case, thereby aligning its enormous authority and resources with you. The more helpful you are to the government, the larger percentage of any eventual recovery you may be awarded.
How was the government damaged by this fraud?
In general, the more damage the government sustained, the greater the level of interest in the case on the part of the government. Since the Relator’s recovery is a percentage of the government’s, in a successful case, the greater the damages, the greater your recovery will be as well. In addition to the amount of money the government paid when it shouldn’t have, the False Claims Act also provides for the recovery of two or three times the amount of damages which the government sustains plus a $5,500 to $11,000 penalty for each false claim submitted. In some situations, each individual bill or form submitted to the government counts as a “claim,” which means the penalties in these cases can sometimes be as much as, or more than, the actual damage caused to the government. Each case, however, is different and not all of the damages or penalties are recovered in every case.
What are My Potential Risks?
What is my involvement in the fraud?
Is my knowledge of the fraud direct and independent, or is it second or third-hand?
Has the fraud been publicly disclosed?
Too much and too little involvement can both be a problem. To qualify as a Relator, if the fraud has been publicly disclosed, you may need to show that you have direct and independent knowledge of the fraud (not just something you heard or read about third-hand). On the other hand, too much involvement on your part can lead to a decreased monetary recovery, or worse, can lead to your becoming a target of a government investigation.
Blowing the whistle does not automatically protect you from prosecution. Not only that, a person who “planned or initiated” the fraud, or who is convicted of a crime arising out of the fraud, or who is given immunity by the government, may be barred from all or part of a Qui Tam recovery.
Is there information about me or my past that reflects negatively on me?
We need to know about any skeletons that may be in your closet in order to deal with them effectively, instead of being surprised by them at an inopportune moment. If you find yourself in doubt about whether to confide in us, remember what you tell us is confidential and we cannot deal with a problem without knowing about it. What will happen if the other side knows about it and we do not? If the government finds out on its own–or from the defendant–you and us may lose credibility. By keeping us uninformed about problem areas, you are hurting yourself.
Did I ever complain or protest about this fraud, or any of the issues or facts relating to the fraud?
As a result, was I discriminated against, retaliated against, or otherwise harmed at work?
Whistleblowers are not always popular at their work, and they are sometimes subjected to harassment or ostracism. The False Claims Act provides some protection, stating:
“Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole.” (31 U.S.C. 3730(h))
What are my Rewards and Protection?
What Rewards and Protections Does the False Claims Act Give a Whistleblower?
If the whistleblower’s suit is successful, he or she may receive from 15-30 percent of the government’s total recovery. Relator’s awards in cases where the government participated total over $750 million (an average of 16% of recovery). In cases where the government did not participate, relator’s awards total over $63 million (an average of 28%).
The False Claims Act also prohibits an employer from harassing or retaliating against an employee for attempting to uncover or report fraud on the federal government. If retaliation does occur, the Relator may be awarded “all relief necessary to make the employee whole,” including reinstatement, two times the amount of back pay, litigation costs, and attorney fees.
Final Points to Remember
Even though the case is initially filed “under seal,” your anonymity, once the case has been filed, cannot be assured.
These cases can, and usually do, drag on for years, and the results are never certain.
If the Department of Justice decides not to intervene, and the Relator continues with the case, the Relator may be responsible for paying the defendant’s legal fees and expenses.
If the defendants have any claims against you, they may be able to bring them against you in connection with the Qui Tam action or in a separate action.
If you personally have committed a crime, filing a Qui Tam case will probably not provide you with any legal protection.
Certain types of cases are exempt from the Qui Tam statute.