Welcome to the Whistleblowers, Qui Tam &
False Claims Act Legal Blog.
I. The Statute of Limitations in False Claims Act Cases
The statute of limitations for a qui tam action is found in
Section 3731(b) of the FCA: "A civil action under section 3730 may
not be brought-
(1) more than 6 years after the date on which the violation of
section 3729 is committed, or
(2) more than 3 years after the date when facts material to the
right of action are known or reasonably should have been known by
the official of the United States charged with responsibility to
act in the circumstances, but in no event more than 10 years after
the date on which the violation is committed, whichever occurs
To continue reading The Statute of Limitations in False Claims
A whistleblower considering reporting fraud under the False
Claims Act should be aware that getting a qui tam case on file
before any other potential whistleblower is a critical and
necessary part of any potential recovery.
To continue reading Qui Tam 101: The False Claims Act's
Under the Dodd-Frank Act, whistleblowers who provide original
information to the Securities and Exchange Commission (SEC) that
leads to a successful enforcement action resulting in a penalty of
one million dollars ($1,000,000) or more are entitled to a reward
of 10% to 30% of the penalty. The information can relate to actual
or potential fraud. The SEC has been receiving an average of 8 tips
per day from whistleblowers in the United States and many foreign
To continue reading SEC Whistleblower Program - Review of Year
Although it is generally the case in federal court that a party
can proceed pro se, that is, without counsel, courts have been
fairly unanimous in holding that a private person cannot bring a
qui tam case on behalf of the United States without being
represented by counsel. See United States ex rel. Mergent Servs. v.
Flaherty, 540 F.3d 89 (2d Cir. 2008); Timson v. Sampson, 518 F.3d
870, 873-74 (11th Cir. 2008) (per curiam); Stoner v. Santa Clara
County Office of Educ., 502 F.3d 1116, 1126-28 (9th Cir. 2007);
United States ex rel. Lu v. Ou, 368 F.3d 773, 775-76 (7th Cir.
2004); United States v. Onan, 190 F.2d 1, 6-7 (8th Cir. 1951). It
appears that there are both statutory and public policy reasons for
To continue reading Whistleblowers not permitted to litigate
cases under False Claims Act without counsel,
On October 30, Texas Attorney General Greg Abbott announced that
the state had won $19.9 million in a False Claims Act settlement
from Novartis for its unlawful marketing of an exczema treatment
for infants, in order to bill medicaid. Texas' largest single
recovery came earlier this year, in a whistleblower action brought
by Allen Jones against Johnson & Johnson. Jones alleged that
Johnson & Johnson had marketed the antipsychotic drug Risperdal
for unapproved purposes, particularly for the treatment, in order
to bill medicaid. The whistleblower case settled in the middle of
trial for $158 million. The information developed in both of these
cases is expected to lead to vary large recoveries by other state
governments, and by the federal governments well, since the
unlawful marketing was nationwide. Tragically, in both of these
cases children were exposed to serious side effects from medication
that had not been proven effective for them.
To continue reading Texas, a Leader in Whistleblower Lawsuits,
1) Fraud against the United States or State governments.
Government funds are falsely paid because companies give false
information or engage in unlawful schemes to inflate the
reimbursement. 2) Common areas are Medicare or Medicaid fraud
involving drugs or medical devices, defense contractor fraud, HUD
reimbursement fraud, tax fraud, securities fraud, and fraudulent
government loans or grants, including educational loans or
To continue reading What Makes A Good Whistleblower/Qui Tam Case, click here.
The Fifth Circuit recently affirmed the dismissal of
a qui tam
relator's claims under the False Claims Act for failing to
"clearly state the substance of the fraud that has been committed."
In upholding dismissal of the whistleblower's claims, the court
emphasized the fact that "descriptive or conclusory allegations"
are not sufficient to state
a claim under the False Claims Act. , --- F.3d ---, 2013
WL 4436264 (5th Cir. Aug. 20, 2013).
To continue reading Successful Fraud Claims Under the False
Claims Act Require More Than Mere Whistleblower Allegations,
From extensive experience, we understand that
whistleblowers have deep concerns regarding their part in qui tam
cases. We understand how being a qui tam relator may affect
their career and their family. Berger & Montague has
represented whistleblowers in complex qui tam
litigation and understands that the focus of our work starts
with and ends with the whistleblower. If the potential client is
prepared to move along, we start a detailed investigation of the
alleged fraud on the government, including, but not limited to,
reviewing all relevant documentation, conducting multiple
interviews, and consulting with various specialists, if need
To continue reading Free Qui Tam Lawyers Case/Lawsuit/Claim
Analysis - Take Action,
When clients retain Berger & Montague when reporting a
Medicaid or Medicare fraud claim, the firm typically utilizes
the False Claims
Act (FCA) to recover the fraudulently obtained funds.
Under the FCA, the whistleblower can receive 15% - 30% of the funds
recovered as a reward for uncovering the fraud. Hundreds of
billions of dollars are paid by the government each year for
Medicaid and Medicare services, so the potential for fraud against
the government is vast, particularly since the government relies on
the "honor system" to obey the law. Sadly, we know
individuals and companies routinely break the law and submit
fraudulent or false charges to the government. Berger &
Montague's Whistleblower Practice can help unravel healthcare fraud
against the government.
To continue reading How to Report Medicaid and Medicare
When a relator brings a false
claims action in the name of the Government under
Claims Act ("FCA"), the Government may elect to pursue
its claim through any alternate remedy available to the Government,
including any administrative proceeding, to determine a civil money
penalty. If any such alternate remedy is pursued in another
proceeding, the person initiating the action shall have the same
rights in such proceeding as such person would have had if the
action had continued under the FCA. ((31 USC §3730(c)(5)).
Thus, the False Claims Act has an alternate remedy provision which
gives the relator the same rights in the alternate proceeding that
he or she would have had if the action had continued under the
There is no identical "alternate remedy" section in the
SEC Whistleblower Statute or corresponding rules. Section
21F of the Securities Exchange Act of 1934 ("Exchange Act") (15
U.S.C. §78u-6), entitled "Securities Whistleblower Incentives and
Protection," requires the Securities and Exchange Commission (the
"Commission") to pay awards, subject to certain limitations and
conditions, to whistleblowers who provide the Commission with
original information about violations of the federal securities
laws. There is no provision for the Commission itself to
pursue the claims through an alternate means or to pass the claims
off to a different administrative agency or judicial body, and then
pay an award to the whistleblower on any monetary result achieved
by that agency or body.
Whistleblower Rules do allow a whistleblower to receive an award
for a recovery in a "related action" - including actions
brought by the Department of Justice - IF the SEC itself brings an
action based on the whistleblower's submission and recovers more
than $1 million and the original information that the whistleblower
gave to the Commission is the same information that led to the
successful enforcement by the other entity in a "related
To continue reading False Claims Act's "Alternate Remedy
Provision" & the SEC Whistleblower Statute's "Related Action"
Provision, click here.
In July 2010, the
Dodd-Frank Wall Street Reform and Consumer Protection Act was
signed into law by President Obama. Section
922 of the Act states that the SEC will be required to pay a
reward to individuals who provide original information to the SEC
resulting in monetary sanctions exceeding $1 million in civil or
criminal proceedings (commonly referred to as the SEC whistleblower
act or program). The purpose of this SEC whistleblower
act and reward program is to "motivate those with inside
knowledge to come forward and assist the Government to identify and
prosecute persons who have violated securities laws and recover
money for victims of financial fraud." Section 748 amends the
Commodity Exchange Act to create a whistleblower incentive program
and whistleblower protection provision that are substantially
similar to the SEC whistleblower act and reward program.
To continue reading SEC Whistleblower Law and the Securities
Whistleblower Act, click
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer
Protection Act ("Dodd-Frank") was enacted. Dodd-Frank Section
922 creates a new Section 21F of the Securities Exchange Act of
1934 that allows for monetary awards for individuals who "blow the
whistle" to the Securities and Exchange Commission ("SEC") about
violations of securities laws. The issue arises as to whether a
whistleblower must report violations to the SEC to qualify for the
anti-retaliation protections afforded under Section 922.
Courts are not in agreement over the answer to this question.
To continue reading Anti-Retaliation Provisions: Dodd-Frank v.
Qui tam whistleblowers filing claims under the False Claims
Act face a difficult choice: what law firm to hire? There
are many lawyers who will portray themselves as being capable of
handling a qui tam
case. But many are not. These cases involve complex
legal issues, and also can be extremely resource intensive.
They often require the firm to depose large numbers of witnesses,
and to hire expensive experts/consultants. Moreover, False
Claims Act cases often involve the review of millions of pages of
documents which are subpoenaed from the defendant-company.
To continue reading Searching and Picking a Whistleblower Qui
Tam Law Firm for Your Case,
Regardless of your political persuasion, your view about big or
small government, or even your position on various government
programs, everyone would agree that we need to catch and reduce the
amount of fraud committed on the government. Private citizens
-- whether as consumers, employees, patients or observers -- play a
critical role in tamping down fraud.
To continue reading Should I be a whistleblower and report
government fraud?, click
Whistleblower ("qui tam") cases under the Federal
False Claims Act (FCA") and comparable State False Claims Acts are
often extremely complicated. There are many traps for the
unwary. You want to make sure you have an experienced
Delaware lawyer who has years of experience handling whistleblower
and qui tam cases. Moreover, since qui tam lawsuits involve a
tremendous amount of communication with federal and state
governments, it is important for your qui tam lawyer to
have extensive relationships with the United States Department of
Justice, the Federal Bureau of Investigation, the Securities and
Exchange Commission, the Internal Revenue Service, State Attorney
General's, and many other state and federal agencies.
To continue reading Picking a Qui Tam Lawyer in Delaware, click here.
The Federal False Claims
Act (FCA) is the primary weapon in combating fraud against the
federal government. The FCA covers fraudulent claims made
against any federal agency, program, contract, or grant. Many
states have similar laws to protect themselves against fraud.
Under the FCA, whistleblowers are permitted to bring a case on
behalf of the federal government to recover damages on its behalf.
The FCA is a very complex area of the law with a number of
unique provisions that an unexperienced attorney may overlook or
misinterpret. It is important to find a whistleblower qui tam law
firm with extensive knowledge and experience litigating FCA
To continue reading Federal
False Claims Act Lawyers and Qui Tam Attorneys,
Many qui tam whistleblowers participated, to one degree or
another, in the very fraud that they later report to the
government. Usually this is because they either didn't
know the law, or they needed to keep their job and felt they would
be fired if they did not "go along." This puts the
whistleblower, also known as a "Qui Tam Relator,"
in a very awkward situation - on the one hand, the whistleblower
wants to do the right thing and report the conduct, but on the
other hand, does not want to become a target of a government
To continue reading Immunity and Protection For Qui Tam
Timing is first and foremost. The Federal False Claims Act is a
"first to file" law which means that the lawsuit can be dismissed
if the relator (the whistleblower who brings the lawsuit) is not
the first to make the allegations. Unlike most qui tam lawsuits, a False Claims Act complaint is served
on the government and filed under seal, and not initially served on
the Defendant. Due to the government's extensive resources,
there is a significantly greater chance of success when the
To continue reading Life of a Qui Tam Lawsuit & Why You Want
the Government to Intervene,
A recent ruling by a New York federal court marks a key
victory for the SEC as it looks to encourage whistleblowers to
come forward and report Wall Street fraud and receive internal
protection. U.S. District Judge Jesse M. Furman ruled
Dodd-Frank Act protects whistleblowers from retaliation
even if they report wrongdoing internally rather than to the SEC.
The decision keeps intact a suit by a former UBS mortgage-backed
securities strategist, Trevor Murray, who claims he was fired after
complaining that bank officials were pressuring him to skew his
research to support the firm's trading and loan origination
To continue reading Recent Ruling Reaffirms Dodd Frank Internal
Protection for Whistleblowers,
The Federal False Claims Act
(FCA) includes a provision which protects whistleblowers from
retaliation from their employers. The Anti-Retaliation
provision of the FCA prohibits an employer from retaliating against
an employee "because of lawful acts done by the employee . . . in
furtherance of an action." 31 U.S.C. §3730(h). An
individual may receive whistleblower protection regardless of
whether a whistleblower lawsuit has been filed under
the False Claims
Act. Conducting an investigation without knowledge
of the existence of the False Claims Act is still considered "in
furtherance of" an action.
To continue reading Anti-Retaliation Provision of the False
Claims Act, click
This article addresses how whistleblowers under the SEC
Whistleblower Program are protected from being discharged, demoted,
suspended, threatened, harassed or in any other manner
discriminated against, because he or she reported a violation
internally and/or to the Securities and Exchange Commission
("Commission" or "SEC"). SEC whistleblowers are to
report violations of federal securities laws, violations of the
rules of a self-regulatory organization (such as FINRA) or
violations of the Foreign
Corrupt Practices Act (which concerns allegations related
to bribery of foreign officials).
To continue reading Whistleblowers Under The SEC Whistleblower
Rules & Employer Retaliation Protection,
Twenty-nine states and the District of Columbia have enacted a
False Claims Act. Each of those States' False Claims Acts is
modeled after the federal False Claims Act. States have a
financial incentive to enact state false claims laws that are at
least as effective as the FCA in rewarding and facilitating
relator's lawsuits for false claims to the state Medicaid program.
By doing so, states qualify under the federal Deficit Reduction Act
of 2005 for an additional 10 percent share of the amount recovered
using the state law.
To continue reading Reporting Fraud Under the State False Claims
Under the False Claims Act, a whistleblower bringing a qui tam
complaint must allege his/her claims with particularity under
Federal Rule of Civil Procedure 9(b). Under Rule 9(b), plaintiffs
(including False Claims Act whistleblowers) must plead the "who,
what, when, where, and how" of the alleged misconduct. But
does a qui tam lawsuit need to identify specific false claims and
facts that show those specific claims were actually submitted to
To continue reading Whistleblower Lawsuits Under the False
Claims Act: Does a Qui Tam Relator Need to Identify Specific False
Claims Submitted to the Government?,
False Claims Act, 31 U.S.C. 3730(e)(4)(A)(iii), "the court
shall dismiss an action or claim . . . unless opposed by the
government, if substantially the same allegation or transaction as
alleged in the action or claims were publically disclosed from the
news media. Because "news media" is not defined in the act,
the courts have frequently been called upon to determine what is
meant by that term.
Are advertisements "news media" under the False Claims Act? Is the
internet considered from the news media under the False Claims
To continue reading What is meant by news media under the
False Claims Act?, click
In response to the global financial crisis in 2008, Congress
passed financial reform legislation known as the Dodd-Frank Act in 2010, which
came into effect in August 2011. In addition to the sweeping
new financial regulations, the Dodd-Frank Act contained whistleblower
provisions to encourage and incentivize any natural person (not
companies or entities) to report securities violations and expanded
the protections for whistleblowers, which were in place under the
To continue reading SEC Whistleblower Statute: Section 922 of
the Dodd-Frank Act,
Under the Federal False
Claims Act (the FCA) a whistleblower or "relator" may
still be able to recover even if the fraud has been publicly
disclosed. The FCA defines a limited number of sources which
qualify as "public disclosures" which would bar an FCA suit.
However, even if the fraud has already been publicly disclosed, the
relator may still recover if s/he qualifies as an "original source"
under the FCA. The Affordable Care Act provides that
a case shall be dismissed if there has been public disclosure
unless "opposed by the Government."
To continue reading Affordable Care Act: Do I Have a
Whistleblower Case if Fraud Publicly Disclosed,
Pharmaceutical company, GlaxoSmithKline has agreed to pay $3
billion in fines to settle criminal and civil violations.
This is the largest health care fraud settlement to date in
the United States. The qui tam portion of
the civil lawsuit arose under the False Claims Act and is
said to be worth over $1 billion. At issue in the civil suit
were claims relating to the company's medications, including Paxil,
Wellbutrin, Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent,
Valtrex, and Avandia. The alleged violations included
promoting the medications for off-label marketing and unapproved
purposes, misleading reports on treatment guidelines, false
representations of drug safety, reporting false drug prices, and
kickbacks paid to promote the drugs. As a result, claims
based on these activities were submitted to the federal government in violation of the
False Claims Act.
To continue reading GlaxoSmithKline False Claims Act Suit to
Settle for $3 Billion,
The Securities and Exchange Commission ("SEC") whistleblower
program created under section
922 of the Dodd-Frank Act incentivizes those with
knowledge of securities violations to "blow the whistle" on the
person or company engaging in such conduct. To initiate a suit, the
whistleblower must complete and file a Form TCR (i.e., a Tip,
Complaint or Referral Form), available on the SEC website detailing
the violations and providing evidence and facts. If the SEC
recovers money using the information the whistle blower provided,
may apply for an award and stands to recover a portion
of the money.
To continue reading The Whistleblower Program under the
Dodd-Frank and the Foreign Corrupt Practices Act,
On March 23, 2010, the President signed into law the healthcare
overhaul bill, known as the Patient Protection and Affordable Care
Act ("PPACA"). The PPACA includes a number of amendments to
the False Claims Act. The most significant amendment to
the False Claims
Act relates to the "public disclosure bar." The False
Claims Act's public disclosure bar prevents would-be
qui tam relators from profiting from disclosures of fraud that
have already been exposed, and that have reached the public
To continue reading Patient Protection and Affordable Care Act:
False Claims Act Broadens for Qui Tam Relators,
In the last few years, there has been an increase in the number
of cases filed by whistleblowers--people who have information that
fraudulent claims for payment have been made or are being made to
programs paid for by the government. Other whistleblowers
have information about securities fraud or tax fraud. Often,
though not always, the whistleblower learns of the fraud through
his/her employment. Where a payment from the government is
involved, the programs at issue can be paid for by the United
States government or a state government or sometimes both.
To continue reading Fraud Against The Government - I Need A
False Claims Act provides for an award to a qui tam plaintiff in
the event the government settles a qui tam suit. If the
Government settles a qui tam action brought by a whistleblower
notifying the government of fraud, the whistleblower (often called
a "relator") is entitled to "receive at least 15 percent but not
more than 25 percent of the proceeds of the action or settlement of
the claim, depending upon the extent to which the person
substantially contributed to the prosecution of the action."
To continue reading Government Whistleblower Awards Under the
False Claims Act: Can a Relator Share in Non-Monetary Proceeds of
A federal appeals court has recently concluded that even
estimates known to be false can give rise to a federal false claim
action. Although bid-rigging has long been recognized
as the basis for a false claim action, for the first time, the
9th Circuit court has ruled that underbidding can
create liability under the False Claims
Act. Underbidding is common when government contracts,
especially large defense contracts are involved. An
example of activity that could be a false claim would be a false
estimate. In other words, the bidder provides the government
with a false estimate of how much the work will cost. There does
not, however, have to be evidence that the bidder specifically
intended to commit fraud
against the government. The bidder must know that
the amount bid is not what it actually intends to charge. In
the alternative, what is important under the False Claims Act issue
is whether the bidder deliberately ignored or recklessly
disregarded the true cost of the work.
To continue reading Federal False Claims Actions May Be Based On
Whistleblowers submitting claims under Sec. 7623(a) or (b) must
complete IRS Form 211, Application for Award for Original
Information, in order to qualify for the whistleblower
award. If they submit claims without completing the form, they
will not be eligible for the reward. The Form 211 must be completed
in its entirety and include the following...
To continue reading How IRS Whistleblower Claims and Cases Are
Filed For Awards By Tax Fraud Lawyers,
The amended IRS Whistleblower Statute provides for two types of
awards and rewards: those disputes over or under $2 million
To continue reading IRS Awards and Rewards For Whistleblowers
Finding Government Fraud,
A threshold requirement for any IRS tax fraud whistleblower
award under 7623 is that the information must lead to judicial or
administrative action meaning an audit or investigation resulting
in the collection of proceeds. An analyst in the
Whistleblower Office will consider the information provided by the
whistleblower. The IRS has to decide that the case is worth
pursuing. The process and evaluation a whistleblower claim,
from submission of complete information to the Service until the
proceeds are collected, may take several years. Payments of
whistleblower awards from the IRS will not be made until after
the taxes, penalties, interest, additions to tax and additional
amounts that are finally determined to be owed to the Service have
To continue reading Process for Evaluating Whistleblower's
Claims and Seeking Tax Fraud Lawyers for IRS Awards,
The IRS awarded former banker at UBS, whistleblower Bradley
Birkenfeld an award of $104 million for the inside information he
provided related to UBS's illegal offshore banking tax fraud
case. UBS AG, a corporation organized under the laws of
Switzerland, operates a global financial services business. This is
a big win for IRS
tax fraud lawyers and whistleblowers unraveling tax
fraud against the government.
To continue reading IRS Awards Whistleblower For Tax Fraud Case:
Birkenfeld and IRS Tax Fraud Lawyers Victory,
First, a whistleblower who has been retaliated against may
bring his or her own private action in federal district
court. See Section 21F(h)(1) of the
Exchange Act (15 U.S.C. 78u-6(h)(1)(B)(1)) The Statute of
Limitations is 3 years from the date of the retaliatory
action. An employer that is found liable will be ordered to
reinstate the employee to the position previously held, or to a
similar position. Additionally, the employer may be required
to compensate the employee for two times the back pay. The employee
also may be entitled to compensation for expenses incurred during
the litigation process, such as witness' and attorneys' fees and
other costs. Second, the SEC can bring its own enforcement action
against a company for retaliatory action against a
To read more about SEC Whistleblower Protection & Unfair
please read here.
Under the Delaware False Claims Act in effect until July 16,
2009 only an "affected person" could bring a False Claims Act
action. An amendment to the Delaware False Claim Act eliminated
this limitation allowing "any person or labor organization" to
bring a suit under the Delaware False Claim Act. Del. Code
Ann. Tit. 6, § 1202(b)(1) (2009). The Delaware False Claims
Act was amended on July 16, 2009, repealing the "substantial
To read more details of the
Delaware False Claims Act and Qui Tam Law, click here.
Similar to the Delaware False Claims Act, under the New Mexico
False Claims Act states that if the government declines to take
over a qui
tam action, the party bringing the action shall have the
right to conduct the action if the New Mexico Department of Human
Services determines that there is substantial evidence that the
violation has occurred. N.M. Stat.§27-14-7(E)(2) (2004).
Also similar to the Delaware False Claims Act, the New Mexico
False Claim Act only permits an "affected person" to bring a
suit. However, the New Mexico False Claim Act does not define
"affected person." New Mexico qui tam lawyers should take note of
this specific provision prior to filing a qui tam case under the
New Mexico False Claims Act.
To learn more about New
Mexico False Claims Act Law, click here.
The Texas False Claim Act was amended and the amendment became
effective on May 4, 2007. The new version of the statute states
that if Texas declines to take over the action, "the person
bringing the action may proceed without the state's participation."
Tex. Human Res. Code Ann. § 36.104 (2010).
To read further about the details of the Texas
False Claims Act and Qui Tam Actions, click here..
The New York False Claims Act was originally enacted on April 7,
2007 and was modeled after the federal False Claims Act. At
the time of passage, the provisions were nearly identical to the
then-1986 version of the federal False Claims Act. However,
in 2009 and 2010, Congress amended the federal False Claims Act.
New York followed suit amending the New York False Claims Act
in August 2010. Although largely identical to the federal False
Claims Act, the New York False Claims Act differs in some
To read the major changes to the
New York False Claims Act, please click here.
On August 16, 2012, the California Assembly passed a bill (AB
2492) amending California's False Claims Act, Cal. Gov't Code §§
12650-12656, which must be signed into law by Governor Jerry Brown.
The amendments largely conform the California False Claims Act to
the federal False Claims Act.
To read about the key amendments to the CA False Claims Act,
please read here.
A party who has been found to have submitted a false claim, or
who has caused the submission of a false claim to the United States
False Claims Act is liable for a civil penalty of not less than
$5000 and not more than $10,000 plus three times the amount of
damages that the Government sustains , 31 U.S.C. Section 3729(a).
Although the False Claims Act is not new and the application
of this formula may appear to be straight forward, exactly how
these damages are calculated can depend on in which federal
judicial circuit the false claims action was brought.
The courts can look at different measures in order to determine
the amount of damages. Generally, the courts use a "benefit of the
bargain" analysis in false
claims cases. In other words, as is done in many breach
of contract cases, they look at the difference in value between
what the government received and what it paid. To read
further about the Benefit of the Bargain Analysis in False Claims
Is there False Claims Act liability regarding fraudulent
applications for federally guaranteed loans, where there are no
defaults on those loans after the government guarantees them and
the government is not required to expend any funds in support of
those guarantees or otherwise is not financially harmed? The
question arises, for example, when mortgage lenders file false
applications for loan insurance from the Federal Housing
Administration ("FHA") or the Department of Veterans Affairs
("VA"), or when the U.S. Department of Energy ("DOE") guarantees
loans under false pretenses for certain renewable energy projects
under the American Recovery and Reinvestment Act of 2009.
There exists an ample body of case law involving FCA claims arising
out of fraudulent applications for federally guaranteed loans. To
read further about False Claims Act Liability and Fraudulent
Applications for Federally Guaranteed Loans,
A further issue that arises is the question of what is trebled.
The answer to this question has led to two different results, a
"gross trebling" approach or a "net trebling"
approach. In the gross trebling approach, the court trebles
the amounts paid by the government and then subtracts any value
received by the government. In the net trebling approach, any
amounts or value the government has received is subtracted
from the amount the government has paid and the result is then
trebled. The difference between gross trebling and net trebling is
significant. To read further about the different approaches,
To read further about How Should False Claims Act Damages be
The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b),
arose out of congressional concern that remuneration provided to
those who can influence healthcare decisions would result in goods
and services being provided that are medically unnecessary, of poor
quality, or harmful to a vulnerable patient population. To protect
the integrity of the Medicare and Medicaid programs from these
harms, Congress enacted a prohibition against the payment of
kickbacks in any form. First enacted in 1972, Congress strengthened
the statute in 1977 and 1987 to ensure that kickbacks masquerading
as legitimate transactions did not evade its reach. The
Anti-Kickback Statute prohibits any person or entity from offering,
making, soliciting, or accepting remuneration, in cash or in kind,
directly or indirectly, to induce or reward any person for
purchasing, ordering, or recommending or arranging for the
purchasing or ordering of federally-funded medical goods or
To read more about the The Origins and History of the Medical
Anti-Kickback Statute and Filing a Medicare Part B Whistleblower
please read here.
A recently unsealed action brought under the False Claims Act
is one of the first to allege claims related to Medicare Part
D. Medicare contracts with private entities known as Part D
sponsors to administer prescription drug plans. A sponsor may
use subcontractors to obtain and provide the medications.
Medicare makes certain monthly payments based on a complex
set of estimates to the plan sponsor. In the following year, there
is a reconciliation of the amounts paid against what the sponsor
bid in order to provide benefits.
To read more about False Claims Actions May Rise Under Medicare
Part D, please
The SEC Whistleblower Program
provides monetary incentives for individuals to come forward and
report possible violations of the federal securities laws to the
SEC. The SEC Whistleblower Program also incorporates
violations of the Foreign
Corrupt Practices Act (FCPA) as reportable misconduct to the
SEC. The reason the SEC enforces violations of the FCPA in addition
to securities laws is because, at its simplest, the FCPA prohibits
two things: (1) bribery of foreign officials in return for
business; and (2) failure to maintain adequate books and
records. In essence, the FCPA prohibits bribing foreign
officials, but requires a company that does bribe to include those
bribes in its financial records. Thus, it makes sense that
the SEC would be able to prosecute violations of the FCPA because
it also involves misleading financial statements and the failure to
maintain adequate books and records.
To read more about The Laws Enforceable Under the SEC
Whistleblower Program & Foreign Corrupt Practices Act,
please read here.
When an action is filed under the
False Claims Act (FCA), 31 U.S.C. §3729 , it is not
unusual for a court to consider such issues as whether the relator
is the first to file or whether there has been prior public
disclosure of the relator's allegations. In a recent
decision, U.S. ex rel. Carter v. Halliburton Co., et al., 710 F.3rd
171 (4th Cir. 2013) the Fourth Circuit Court of Appeals
focused on a more unusual issue, the application of the Wartime Suspension of
Limitations Act (WSLA), 18 U.S.C. § 3287 to a false
The whistleblower, Carter, claimed the defendants fraudulently
billed the United States for services provided to military forces
serving in Iraq by billing for work not performed and by submitting
inflated time sheets. His case has a complex procedural
history. His original complaint was filed in 2005 based on
conduct occurring in that year. The case in the Court of
Appeals was based on a subsequent complaint filed in 2011 that had
been dismissed by the district court as having been filed more than
six years after the fraudulent conduct alleged and therefore
time barred by the statute of limitations in the FCA, 31 U.S.C. §
3731(b). The Fourth Circuit applied the WSLA and
Learn more about Defense Contractor Fraud here.
To read more about: Court Holds Tolling Provisions of the
Wartime Suspension of Limitations Act Applies to Actions filed
under the False Claims Act,
please read here.
Claims Act is intended to restore money to the Government that
was taken from it by fraud. With that purpose in mind, courts
have found that the Act can apply to contracts or benefits that
were originally obtained through a false statement or fraudulent
conduct. United States ex rel. Hendow v University of Phoenix, 461
F.3d 1166 (9th Cir.2006), cert. den. 550 U.S. 903 (2007). In
other words, false claims may exist because the contract was
tainted from the beginning. There can be liability for each
claim submitted under a contract which was induced by fraud, even
if the claims on their face are not false, United States v. Toyobo
Co. Ltd., 811 F. Supp. 2d 37 (D.D.C. 2011). This means you can have
a situation where the work was performed, but the claim is still
false because the contract is based on a fraudulent statement.
To read more about False Claims Actions Based Upon Contracts
Procured By Fraud,
please read here.
- Off-Label Marketing vs. Off-Label Prescribing
- Medicare Fraud and Medicaid Fraud False Claim Cases
- False Claims and Freedom of Speech
To read more about 3 Types of Qui Tam Off Label Marketing Cases
under the Federal and State False Claims Acts,
please read here.
These cases suggest that in order in order to be considered to
have materially added to information that has been publically
disclosed the False Claims Act relator must have substantial new
information. This new information cannot consist of small details
or interpretation of facts, but must consist of new facts
concerning practices and bad acts beyond claims that have been
publically disclosed and more than just variations in practices
that are already known. The information must also be information
the Government could not be expected to know based on a reasonable
investigation of publically disclosed conduct. Please read below to
learn about who is eligible as an original source as a Qui Tam
Relator and Whistleblower.
To read more about Who is an Original Source under the 2010
Amendments to the False Claims Act,
please read here.
Kickbacks are often the basis for an action under the False
Claims Act. The
federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), ("AKS")
arose out of congressional concern that payments or things of value
provided to those who can influence healthcare decisions
would result in goods and services being provided that are
medically unnecessary, of poor quality, or harmful to
patients. To protect the Medicare and Medicaid programs from
these harms, Congress enacted a prohibition against the payment of
kickbacks in any form, See United States v.
Greber, 760 F.2d 68, 70-71 (3d. Cir. 1985).
To read more about False Claims Actions Based on
Kickbacks, please read
- Doctors signing prescription pads for others to fill in with
prescriptions for controlled substances.
- Prescriptions that include less than the required
To read more about 5 Warning Signs for Government Fraud and
Resulting in False Claims Act Violations,
please read here.
In a major victory for employees reporting fraud under the
Sarbanes Oxley Act (SOX), the Third Circuit Court of Appeals
recently revived whistleblower
claims brought against Tyco Electronics Corp. by an accountant
who reported improper expenditures and was allegedly terminated as
a result. The highly-anticipated decision in Wiest et al. v.
Lynch et al. potentially expands the scope of SOX's retaliation
provision, rejecting a stricter interpretation approved by the
Fourth Circuit and instead bringing the standard in line with the
U.S. Department of Labor's more worker-friendly interpretation.
To read more about Victory for Whistleblowers Reporting Fraud
under Sarbanes Oxley,
please read here.
Feds Say Whistleblower Cases Can Be Pursued Even Where the
United States Could Pursue Relief Through an Administrative Avenue
or Where the Alleged False Statement Was Not Included in the Actual
Claim for Government Funds
To read more about the false claims act claim,
please read here.
A federal district court recently denied a motion for judgment
on the pleadings in a qui tam
action and reaffirmed the right of whistleblowers who report
Medicare fraud to recover civil penalties under the False Claims
To read more about Federal Court Reaffirms Whistleblower's Right
to Bring Qui Tam Lawsuit To Recover for Medicare Fraud,
please click here.
Section 812 of the Controlled Substances Act ( 21 U.S.C.
§801 et seq.) ("CSA") lists substances which were controlled in
1970 when the law was enacted. Since then, approximately 160
substances have been added, removed, or transferred from one
schedule to another. The current official list of controlled
substances can be found in section 1308 of the most recent issue of
Title 21 Code of Federal Regulations (21 CFR §1308). Some examples
of controlled substances in each schedule are outlined by
To read more about False Claims Act Violations Regarding
Controlled Substances, Prescriptions and Pill Mills,
please read here.
Although Congress clearly authorizes private qui tamrelators to
continue their cases even if the Department of Justice declines to
intervene in the suit,compare 31 U.S.C. 3730(c)(3) with
former Tex. Hum. Res. Code Ann. §
36.104(b) (amended 2007)(requiring dismissal if state
did not intervene in action); rewards whistleblowers with a higher
percentage of the government's recovery if DOJ does not intervene,
31 USC 3730(d)(1), (2); and deliberately amended the False Claims
Act in 1986 to eliminate "government knowledge" as a bar to private
enforcement actions, see Graham Cnty. Soil &
Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S.
280, 130 S. Ct. 1396, 1407(2010), restrictive
interpretations by the courts barring cases where a prior
disclosure or lawsuit put the government "on the trail of fraud"
continue to severely limit the strong role that private suits could
play in protecting the public fisc.
To read more about Whistleblower Contributions Under The False
Claims Act Cannot Reach Full Potential With an Expansive
Application of the Public Disclosure Bar,
please read here.
Contact Us To Learn More
We invite you to learn more about our Whistleblowers,
Qui Tam & False Claims Act Practice Group. For more
information or to schedule a confidential discussion about a
potential case, please fill out the contact form on the right. You
can also call us at (215) 875-5712.
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