Although corporate scandal captures the media’s attention more often, fraud perpetrated directly against the federal and state governments directly cuts deeper into taxpayers’ pockets.  Ordinary folks can help combat that fraud through so-called “qui tam” lawsuits which, if successfully prosecuted, can result in substantial financial rewards to the “whistle blower” who brings the fraud to the government’s attention.


   Common areas or businesses where government fraud occurs include Medicare, Medicaid and Tri-Care providers, nursing homes and home healthcare providers, pharmaceutical companies, government grants and research projects, weapons and defense contractors, government contracts and projects, environmental contracts and low-income housing.

    Brought under the federal False Claims Act (31 U.S.C. §§ 3729 -3733), qui tam cases are a powerful way for citizens to assist the government in stopping the fraud. The phrase “qui tam” is Latin – meaning, “who as well” – is found in old English law and describes the situation where a person sues on behalf of the Crown and himself.  As such, these types of suits are brought for “the government as well as the plaintiff.”

    Most States, including North Carolina, have enacted “baby” False Claims Acts, which provide for similar whistle blower claims to combat fraud upon the state.  Modeled after the federal False Claims Act, the North Carolina False Claims Act (N.C. Gen. Stat. §§ 1-605 et seq.) permits citizens to bring qui tam actions on behalf of the State to recover treble damages and civil penalties.

    Any person or entity with personal knowledge or evidence of fraud in a federal program or contract may file a qui tam lawsuit under the False Claims Act against an individual or business that is defrauding the government, and recover funds on the government's behalf.  The person or entity filing the lawsuit is called a “Relator.”  The qui tam lawsuit is filed “under seal,” meaning that it is kept secret from everyone but the government to allow the US Department of Justice time to investigate the Relator’s allegations.  Even the person or entity being accused of fraud is unaware of the qui tam case, except or until the court unseals the allegations.

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    Mr. Marshall is “perhaps, the most experienced qui tam and False Claims Act lawyer in the Western District of North Carolina. Mr. Marshall faithfully served his country as the Chief Civil Assistant United States Attorney for many years, and in that capacity became most skilled in the analysis and prosecution of these actions.”

                            – Federal Judge
                                    _____________________________

    Such secrecy is important where, for example, the Relator is an employee of the fraudulent entity who does not want to risk losing her job by revealing the fraud to the government.  Additionally, under § 3730(h) of the federal False Claims Act, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of his or her whistle blower actions is entitled to all relief necessary to make the employee whole.  Such relief may include reinstatement, back pay (doubled), litigation costs and reasonable attorneys’ fees.

    A Relator’s success in bringing a qui tam action ultimately depends on the amount of supporting evidence and how well framed the lawsuit is.  The qui tam complaint and its supporting documents should provide the government with detailed information about the fraud, with which information the government can then further investigate the allegations – often with the assistance of the Relator’s attorney – until it decides whether it will intervene in the case directly.

    The government intervenes in only a small percentage of qui tam lawsuits but its decision to join the suit is a desirable development for the Relator because of the vast resources the government can bring to the action.  If the government chooses not to intervene, the Relator has the option to pursue the qui tam case on his own, which can be quite difficult.

    The amount of the whistle blower reward depends on many factors, including the quality of the case as presented to the Justice Department and the work of the whistle blower’s attorney to help the qui tam case succeed. If the government intervenes in the case and recovers funds through a settlement or a trial, the Relator, is entitled to 15 percent to 25 percent of the recovery. If the government doesn't intervene in the case and the matter is pursued successfully by the Relator’s and his legal team, the whistle blower reward is between 25 and 30 percent of the recovery.  Where the government has been defrauded of millions or even billions of dollars, these percentages add up.

    Once a person has evidence of fraud against the government and decides to “blow the whistle,” that person needs to find a lawyer to represent him/her.  Like any lawsuit, there are time limits applicable to qui tam actions.  Under the federal False Claims Act, an action must be filed within the later of (1) six years from the date of the violation of the Act; or (2) three years after the government knows or should have known about the violation, but in no event longer than ten years after the violation of the Act.
 
    For further information about qui tam actions, access the FAQ page on our website. You may also obtain a copy of, The Whistleblower's Handbook: A Step-by-Step Guide to Doing What's Right and Protecting Yourself, which is a consumer’s guide to false claims litigation and whistle blowing. It provides excellent information with its twenty-one rules that explain and offer guidance on how best to blow the whistle on government fraud.

 

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