Our client was charged with Conspiracy to violate the Foreign Corrupt Practices Act (FCPA). The case was dismissed by the government after it was made clear that the government had prosecuted the case incorrectly.
The Federal False Claims Act imposes penalties on any company or individual who defrauds the government. This law applies to any activity funded by U.S. taxpayers (31 U.S.C. § 3729-3733). The District of Columbia and 29 states have also enacted laws modeled on the Federal False Claims Act. The laws have so called qui tam provisions, which allow individuals to sue on behalf of the government and obtain a share of any recovery. See, for example, DC Code § 2-381.01 to 2-381.07. For assistance in pursuing a qui tam action and understanding the Federal False Claims act, you will require aggressive and knowledgeable whistleblower representation.
What penalties do False Claims Act defendants have to pay?
Under the Federal False Claims Act, a defendant found guilty of defrauding the government is subject to pay three times the damages caused by the fraud and civil penalties of up to $11,000 per act. The government has also imposed criminal fines in many large cases. Generally the state laws also impose triple damages and civil fines against defendants found guilty of fraud against a state government.
Can You Sue Under Federal and State Law?
Yes. If the fraudulent activity harms both the federal government and a state with an appropriate False Claims Act, it is possible to sue under more than one law at the same time. If you know about a fraud which is damaging to more than one government be sure to raise this issue with a qui tam lawyer. It may significantly increase the potential recovery available, the scope of the case, and even the attorney’s interest in pursuing the matter on your behalf.
What Types of Fraud Qualify as a False Claims Act Violation?
Any truly fraudulent activity that involves government funds could be the subject of a False Claims Act case. Fraudulent practices that have been the subject of successful qui tam lawsuits include:
- Billing twice for the same service
- Billing and charging for products and services not performed or delivered
- Retaining property owned by the government
- Billing for expensive products but providing cheaper versions
- Defective products sold and certified to be up to standard
- Billing for time on a government project, but working on a private contract
- Billing for goods or material obviously not up to specifications of a contract
- Marketing pharmaceuticals for uses not approved by the government
- Securities fraud
What Can I Win if My FCA Case Succeeds?
The person who files a successful False Claims Act case is able to share in the amount of money recovered by the government. Under federal law the percentage of the recovery ranges from 15%-30%. The percentage of recovery for claims filed under state law differ from state to state.
These laws recognize a difference in the percentages awarded based on the action the government takes to pursue the case. For example, under the Federal False Claims Act, the amount awarded to the plaintiff is between 15 and 25%, provided that the government decided to join the case. This process is often phrased as the government “acting to intervene” in the case and it historically has been in the best interest of the whistleblower (as will be illustrated below). If the government declines to intervene and the whistleblower and the attorneys with Terry Eaton Attorney at Law go forward and win the case, the minimum award under the law is 25 percent and the maximum is 30 percent.
State laws also recognize this difference in the ranges they provide the individual who files the case. In California, for example, a successful plaintiff who files the case and wins without the government deciding to intervene can earn as much as 50% of the recovery.
Does Government Involvement Negatively Impact Recovery?
No. You want the government to intervene in your case. The chances of your case being successful in the long run are vastly improved by the government’s (any government’s) decision to intervene. The process is complicated and the stronger the case you and your attorney can present to the government, the more likely the government will be to intervene and the higher the probability you will succeed. However, the laws do allow for a whistleblower to pursue the case after the government has declined to take it.
Does Protections for the Whistleblower Exist?
Yes. Under the federal law there are protections for a whistleblower who files a successful False Claims Act case. An employer faces penalties for any retaliation against such a plaintiff including double back pay, re-instatement and special damages.
Is My False Claims Act/Whistleblower Case Public Information?
Generally, a qui tam lawsuit is under seal when it is filed with the court. This means the plaintiff can ensure that it is highly confidential during the investigation process. Only the government department or officials who handle the case are initially aware of it. The violator often happens to be the plaintiff’s employer, and they are not informed as to the identity of the whistleblower. The seal is usually be extended by permission of the court beyond the initial 60 day period stated in the federal law to facilitate the government’s confidential investigation. The length of these extensions and the time the case remains secret can depend on the time the government may take to investigate the claims and the willingness of the Court to grant such extensions.
When the investigation is completed, the government will decide if they will join or take over the litigation. Otherwise, the plaintiff and his or her lawyer have the option of proceeding without the government.
Why is it Important to Hire a Qui Tam Lawyer?
The case may seem obvious to a whistleblower who is working for an employer committing the fraud. The whistleblower may know more about the industry than anyone else involved in the case. Explaining the industry, the laws and regulations involved as well as sifting through all the facts of the case can be complicated. In addition, of course, protecting the rights of the whistleblower is crucial to a successful outcome.
Becoming a whistleblower may be complicated and stressful, but there are lawyers in Washington, DC, who can help you through the process. Mr. Eaton and his team of lawyers have experience in this highly complex area of the law. They have handled large cases involving fraud and related criminal activities.
Watch Attorney Tony Munter talk about DC whistleblower reward laws here.