The False Claims Act is a federal statute that allows a person (called a Relator under the law, but commonly referred to as a whistleblower) to bring a lawsuit against a federal contractor for submitting false or fraudulent claims for payment. The whistleblower brings the lawsuit on behalf of the government. The law was created during the Civil War era to encourage people to come forward with information about fraudulent and unscrupulous government contractors who were providing useless products to the Government and getting paid for it. To incentivize people to come forward with information about fraud against the Government, the law allows for a whistleblower to receive 15-30% of whatever is recovered by the Government. The relator’s share is dependent on the amount of work the whistleblower did throughout the case, among other factors.
The case is initially filed under seal, and the Government has 60 days under the law to decide if it will intervene in the case. If the Government intervenes, it takes the lead role in pursuing the litigation. Although the 60-day time limit is imposed by statute, the government almost always seeks extensions of time to conduct a thorough investigation. One of the first things the Government typically does is to interview the Relator with the Relator’s counsel. The Government will have already been provided with whatever evidence the Relator has regarding the fraud because this information is given to the Government before the case is even filed. But, the Relator is in a unique position to give the Government context about the fraudulent conduct.
False Claims Act cases often end in settlements because the potential penalties for the defendants are enormous. Therefore, the risk is very high. The law allows for treble damages (three times the actual losses) as well as penalties per false claim submitted. The amount of the penalties is periodically adjusted because of inflation, but the penalty per claim can be more than $20,000. The law also provides for the defendant to pay the attorney’s fees and expenses for the Relator’s counsel.
Our firm has experience representing Relators in False Claims Act cases. We don’t get paid unless the Relator gets a share of the money recovered by the Government. Our fee is a percentage of the amount awarded to the Relator as well as our hourly fees and expenses that are paid by the defendant if the suit is successful.
If you have information about an unscrupulous and fraudulent Government contractor, contact our firm to discuss if it makes sense to pursue a False Claims Act case.