False Claims Act

False Claims Act

The Qui Tam provisions of the False Claims Act allow persons and entities with evidence of fraud against the Federal Government, or federal programs or contracts, to sue the wrongdoer on behalf of the United States Government. Qui tam is short for “qui tam pro domino regequam pro se ipso in hac parte sequitur,” which means “who pursues this action on our Lord the King’s behalf as well as his own.” An individual who successfully pursues a Qui Tam action is entitled to a bounty that ranges from between 15% to 30% of the government’s recovery. Thus, the Act provides whistle-blowers with huge financial incentives to retain an attorney and expose fraudulent activity against taxpayers. See DOJ-False-Claims-Act-Summary

The following actions are considered violations of the False Claims Act, for which a Qui Tam action could be instituted:

• Knowingly presenting (or causing to be presented) to the Federal Government a false or fraudulent claim for payment;

• Knowingly using (or causing to be used) a false record or statement to get a claim paid by the Federal Government;

• Conspiring with others to get a false or fraudulent claim paid by the Federal Government:

• Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the Federal Government.

False Claims Act cases and procedures are unique, and require a specialized knowledge of the law for a successful prosecution. The action is filed in federal court “under seal,” meaning that it is not available to the public and may only be discussed with government officials investigating the case. Even the defendants — the individual or organization charged with committing fraud — are not told about the lawsuit. This gives the government time to investigate the fraud allegations without alerting the defendant. The seal initially lasts for 60 days, but may be extended longer while the government conducts its investigation.

At the end of the sealed investigative period, the government decides whether to join, or intervene, in the qui tam lawsuit. If the government joins the case, the litigation is conducted jointly by the government and the whistle-blower’s attorney, with the government as lead counsel. If the government declines to intervene, the whistle-blower may go forward with the lawsuit and assumes primary responsibility for running the case.

The timing of a lawsuit can be critical. The first person to file a case under the False Claims Act for a particular fraud preempts all other cases. So, it is important for a whistle-blower to file action before another individual does so. It is also important to remember that False Claims Act claims must be filed within specific time frames. The False Claims Act not only allows a whistle-blower to file suit in the name of the government, but also protects whistle-blowers against retaliation for filing or investigating a potential action.

The Colorado Medicaid False Claims Act imposes liability on persons who knowingly submit false claims to Colorado’s medical assistance programs, including Medicaid. Whistle-blowers may recover between 15% and 25% of any proceeds from the action or settlement if the state intervenes in the case, and between 25% and 30% if the state decides not to intervene. The court may reduce the value of the award if the plaintiff planned or initiated the fraud, or if the action is largely based on disclosures in the media or public hearings. Plaintiffs must file their complaint within specific time frames; otherwise, their claim may be lost.

Please contact Baird Quinn’s Colorado labor and employment lawyers to discuss any False Claims Act matters about which you have questions. You may obtain information regarding our Denver False Claims Act lawyers through the following link.