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Whistleblowers, Qui Tam & False Claims Act Legal Blog

Welcome to the Whistleblowers, Qui Tam & False Claims Act Legal Blog.

Statute Of Limitations Issues Under The False Claims Act

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 last."

To continue reading The Statute of Limitations in False Claims Act Cases, click here.

Qui Tam 101: The False Claims Act's "First-to-File" Rule

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 "First-to-File" Rule, click here.

SEC Whistleblower Program - Review of Year One

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 countries.

To continue reading SEC Whistleblower Program - Review of Year One, click here.

Whistleblowers not permitted to litigate cases under False Claims Act without counsel

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 these rulings.

To continue reading Whistleblowers not permitted to litigate cases under False Claims Act without counsel, click here.

Texas, a Leader in Whistleblower Lawsuits

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, click here.

What Makes A Good Whistleblower/Qui Tam Case

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 grants.

To continue reading What Makes A Good Whistleblower/Qui Tam Case, click here.

Successful Fraud Claims Under the False Claims Act Require More Than Mere Whistleblower Allegations

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, click here.

Free Qui Tam Lawyers Case/Lawsuit/Claim Analysis - Take Action

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 be.

To continue reading Free Qui Tam Lawyers Case/Lawsuit/Claim Analysis - Take Action,   click here.

How to Report Medicaid and Medicare Fraud

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 Fraud, click here.

False Claims Act's "Alternate Remedy Provision" & the SEC Whistleblower Statute's "Related Action" Provision

When a relator brings a false claims action in the name of the Government under the False 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 FCA.

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.

What is the SEC Whistleblower Relation Action?

However, the 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 action."

To continue reading False Claims Act's "Alternate Remedy Provision" & the SEC Whistleblower Statute's "Related Action" Provision,  click here.

SEC Whistleblower Law and the Securities Whistleblower Act

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 here.

Anti-Retaliation Provisions: Dodd-Frank v. Sarbanes Oxley

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. Sarbanes Oxley,  click here.

Searching and Picking a Whistleblower Qui Tam Law Firm for Your Case

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,  click here.

Should I be a whistleblower and report government fraud?

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 here.

Picking a False Claims Act & Qui Tam Lawyer in Delaware

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.

Federal False Claims Act Lawyers and Qui Tam Attorneys

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 cases.

To continue reading Federal False Claims Act Lawyers and Qui Tam Attorneys, click here.

Immunity and Protection For Qui Tam Whistleblowers

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 inquiry.

To continue reading Immunity and Protection For Qui Tam Whistleblowers,  click here.

Life of a Qui Tam Lawsuit & Why You Want the Government to Intervene

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 government intervenes.

To continue reading Life of a Qui Tam Lawsuit & Why You Want the Government to Intervene,  click here.

Recent Ruling Reaffirms Dodd Frank Internal Protection for Whistleblowers

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 that the 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 activities.

To continue reading Recent Ruling Reaffirms Dodd Frank Internal Protection for Whistleblowers,  click here.

Anti-Retaliation Provision of the False Claims Act

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 here.

Whistleblowers Under The SEC Whistleblower Rules & Employer Retaliation Protection

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,  click here.

Reporting Fraud Under the State False Claims Acts

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 Act, click here.

Whistleblower Lawsuits Under the False Claims Act: Does a Qui Tam Relator Need to Identify Specific False Claims Submitted to the Government?

Under the False Claims Act, a whistleblower brining 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 the government?

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?, click here.

The False Claims Act Public Disclosure Bar and the Meaning of "News Media"

Under the 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 Act?

To continue reading What is meant by news media under the False Claims Act?, click here.

SEC Whistleblower Statute: Section 922 of the Dodd-Frank Act

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 Sarbanes-Oxley Act.

To continue reading SEC Whistleblower Statute: Section 922 of the Dodd-Frank Act,  click here.

Affordable Care Act: Do I Have a Whistleblower Case if Publicly Disclosed?

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, click here.

GlaxoSmithKline False Claims Act Suit to Settle for $3 Billion

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,  click here.

The Whistleblower Program under the Dodd-Frank and the Foreign Corrupt Practices Act

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, the whistleblower 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, click here.

Patient Protection and Affordable Care Act: False Claims Act Broadens for Qui Tam Relators

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 domain.

To continue reading Patient Protection and Affordable Care Act: False Claims Act Broadens for Qui Tam Relators,  click here.

Fraud Against The Government - I Need A Whistleblower Lawyer

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 Whistleblower Lawyer, click here.

Government Whistleblower Awards Under the False Claims Act: Can a Relator Share in Non-Monetary Proceeds of Settlement?

The  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 Settlement?,  click here.

Federal False Claims Actions May Be Based On False Estimates

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 False Estimates,  click here.

How IRS Whistleblower Claims and Cases Are Filed For Awards By Tax Fraud Lawyers

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,   click here.

IRS Awards and Rewards For Whistleblowers Finding Government Fraud

The amended IRS Whistleblower Statute provides for two types of awards and rewards: those disputes over or under $2 million dollars.

To continue reading IRS Awards and Rewards For Whistleblowers Finding Government Fraud,   click here.

Process for Evaluating Whistleblower's Claims and Seeking Tax Fraud Lawyers for IRS Awards

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 been collected.

To continue reading Process for Evaluating Whistleblower's Claims and Seeking Tax Fraud Lawyers for IRS Awards,  click here.

IRS Awards Whistleblower For Tax Fraud Case: Birkenfeld and IRS Tax Fraud Lawyers Victory

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,  click here.

SEC Whistleblower Protection & Unfair Employment Agreements

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 whistleblower.

To read more about SEC Whistleblower Protection & Unfair Employment Agreements,  please read here.

Reporting Fraud Under The Delaware False Claims Act

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 evidence" determination.

To read more details of the  Delaware False Claims Act and Qui Tam Law, click here.

How to Report Fraud in New Mexico Under the State False Claims Act

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.

Reporting Fraud Under the Texas False Claims Act

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..

Reporting Fraud Under the False Claims Act in New York

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 significant respects.

To read the major changes to the  New York False Claims Act, please click here.

Reporting Fraud Under the Amended Version of California False Claims Act, if Signed Into Law By The Governor

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.

How Should False Claims Act Damages be Calculated

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  under the 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.

Benefit of the Bargain Analysis in False Claims Cases

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 Cases, click here.

False Claims Act Liability and Fraudulent Applications for Federally Guaranteed Loans

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, click here.

Gross Trebling Approach vs. Net Trebling Approach

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, click here.

To read further about How Should False Claims Act Damages be Calculated, please click here.

Waiving Co-Payments and Deductibles Required Under Medicare Part B Is a Basis for a Whistleblower to Bring a Claim Under the Federal False Claims Act

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 services.

To read more about the The Origins and History of the Medical Anti-Kickback Statute and Filing a Medicare Part B Whistleblower Claim, please read here.

False Claims Actions May Rise Under Medicare Part D

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 read here.

The Laws Enforceable Under the SEC Whistleblower Program & Foreign Corrupt Practices Act

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.

Court Holds Tolling Provisions of the Wartime Suspension of Limitations Act Applies to Actions filed under the False Claims Act

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 claims action.

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 reversed.  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.

False Claims Actions Based Upon Contracts Procured By Fraud

The False 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.

3 Types of Qui Tam Off Label Marketing Cases under the Federal and State False Claims Acts

  1. Off-Label Marketing vs. Off-Label Prescribing
  2. Medicare Fraud and Medicaid Fraud False Claim Cases
  3. 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.

Who is an Original Source under the 2010  Amendments to the False Claims Act

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.

False Claims Actions Based on Kickbacks

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 here.

5 Warning Signs for Government Fraud and Resulting in False Claims Act Violations

  1. Doctors signing prescription pads for others to fill in with prescriptions for controlled substances.
  2. Prescriptions that include less than the required information.

To read more about 5 Warning Signs for Government Fraud and Resulting in False Claims Act Violations,   please read here.

Victory for Whistleblowers Reporting Fraud under Sarbanes Oxley

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.

United States  ex rel. Helen Ge v. Takeda Pharmaceutical Co.

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.

Federal Court Reaffirms Whistleblower's Right to Bring Qui Tam Lawsuit To Recover for Medicare Fraud

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 Act.

To read more about Federal Court Reaffirms Whistleblower's Right to Bring Qui Tam Lawsuit To Recover for Medicare Fraud, please click here.

False Claims Act Violations Regarding Controlled Substances, Prescriptions and Pill Mills

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 clicking here.

To read more about False Claims Act Violations Regarding Controlled Substances, Prescriptions and Pill Mills,  please read here.

Whistleblower Contributions Under The False Claims Act Cannot Reach Full Potential With an Expansive Application of the Public Disclosure Bar

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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