A qui tam lawsuit is a type of civil suit filed by whistleblowers under the False Claims Act.
Qui tam suits are aimed at stopping fraud against the government. Some of the different types of fraud that most commonly gives rise to a qui tam lawsuit include:
- Knowingly presenting a fraudulent claim for payment to the federal government
- Knowingly using a false record or statement to support a payment claim to be paid by the federal government;
- Conspiring with others to get the federal government to pay a fraudulent claim; or
- Knowingly using a false record to conceal, avoid, or decrease obligations to pay money to the federal government.
What Happens During a Qui Tam Lawsuit?
Under the False Claims Act, an employee who has evidence that his or her employer is defrauding the government can sue the employer and recover compensation for the fraud on behalf of the government. For example, if an employee knows that their military supply company has been falsifying records in order to get reimbursements from the government, that employee may bring a qui tam lawsuit against their employer.
A qui tam lawsuit is also referred to as a “whistleblower lawsuit”. If their case results in recovering money for the government (and taxpayers), the False Claims Act rewards whistleblowers and offers them protection from job discrimination.
When a qui tam lawsuit is first filed, the lawsuit remains “under seal” for 60 days. During this time, the lawsuit is secret to everyone except the government. The government uses this time to investigate the case and review the available evidence. If the investigators need more than 60 days to build a good case or seek additional evidence before deciding the case, the court may extend the seal on the case.
Once the investigation is concluded the government decides whether it will pursue charges (also referred to as “intervening” in the lawsuit). Not all qui tam cases have government intervention, but those cases in which the government intervenes typically have a better chance of succeeding.
At that point, the qui tam case may, or may not, go through a full court process. A qui tam case is a civil case and, as with other types of civil cases, a settlement may be negotiated.
Under the False Claims Act, defendants found liable in a qui tam lawsuit may have to pay up to three times the cost of each false claim, plus penalties of $5,000-$10,000 for each false claim. The amount of the whistleblower reward depends on several factors, including how much evidence you presented to the Justice Department or how much your involvement resulted in the success of the suit.
In cases where the government intervenes, a whistleblower is entitled to 15 – 25% of the recovery amount. In cases where the government doesn’t intervene, the whistleblower reward is greater: 25-30% of recovered false claims, plus the applicable penalties.
Whistleblowers in a qui tam lawsuit are protected by the False Claims Act against retaliation from their employer. If you are fired, demoted, harassed, or discriminated against because of your qui tam lawsuit you are entitled to receive reinstatement, double back pay, and compensation for special damages, such as litigation costs and attorneys’ fees, depending on how the law is interpreted in your state.
If you are thinking of filing a qui tam action, protect your interests under the False Claims Act and seek the advice of an experienced qui tam attorney.