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Qui Tam, Rewarding the Whistleblower When a Company Defrauds the Government

Qui tam whistleblower law cases involve companies that defraud the government and are unique among whistleblower cases for the significant awards the whistleblower receives for reporting corporate misconduct. Qui tam whistleblowers are relied upon by the Department of Justice to uncover and prosecute corporate fraud. Despite its importance to the U.S. economy and government, little has been published about qui tam whistleblowers. Most people do not realize an attorney can help whistleblowers’ identity remain confidential and help them keep a portion of the fraud recovery.

A whistleblower is an employer of a company who makes public his or her employer’s wrongdoing. While a whistleblower can report any corporate misconduct (including billing fraud, safety violations, and embezzlement), qui tam cases only involve the whistle blown on instances when the government is defrauded (for common types of corporate government defrauding, see below). Additionally, qui tam whistleblowers must act quickly with a whistleblower lawyer to be the first to file a claim before media or another employee files.

Located in Washington, D.C. and with a network of whistleblower lawyers throughout the United States, the Consumer Justice Group can help you take action as a qui tam whistleblower. The following information is provided to clarify and explain qui tam law to aid the potential qui tam whistleblower.

Qui Tam Whistleblowers, Government Outsourcing of Fraud Investigations
The qui tam (pronounced “kwee tam”) statutes (sometimes called the “False Claims Act” or the “Lincoln Law”) were established by President Lincoln to help reduce rampant corporate fraud and false billing to the government during the Civil War. In 1986, these qui tam statutes were expanded to provide employment protection to whistleblowers and to increase their financial awards.

Financial recoveries from qui tam cases are used to restore the losses to government agencies, pay government investigators, and to compensate the qui tam whistleblower for exposing corporate corruption and taxpayers’ loss.

Financial Awards for Qui Tam Whistleblowers
Qui tam plaintiffs file suit on behalf of themselves and the U.S. government. The qui tam lawyer can sue the offending corporation for three times the government’s damages plus civil penalties ($5,500 to $11,000 per false claim). The whistleblower, or “relator,” is entitled to 15-30% of the government’s total recovery.

In the first decade since the 1986 amendment to the False Claims Act, qui tam whistleblowers helped the government recover over $1 billion. Since 1999, the False Claims Act recoveries have been over $1 billion every year (with a record-setting $3.1 billion in 2006) for a total of over $18 billion recovered. In the 2006 fiscal year, qui tam whistleblowers were awarded $190 million. (Click to read the Justice Department’s 2006 report on qui tam recoveries)

Common Types of Corporate False Claims Fraud
Qui tam investigations in recent years have been brought against Lockheed Martin (numerous times), Union Oil Company of California, PacifiCare Health Systems, OfficeMax, and Hewlett-Packard. The reasons for these qui tam filings are diverse. Many corporations double-bill or defraud the government by charging for services never performed in the belief that government agencies are too big to find the error or that government employees will not care because corporate stealing does cause any direct harm.

Qui tam action is possible anywhere the federal government spends money. This includes government purchases (including fraudulent billing for vehicles, technology, office supplies, and repairs), defense contracting, education grants, farm and land subsidies, housing programs, and insurance (Medicare, Medicaid, etc.) billing. Fraudulent insurance billing accounts for about 80% of all qui tam cases.

Medical Fraud, The Most Common Type of Qui Tam Whistleblowing
Qui tam cases for medical fraud and abuse have been rewarded over $5 billion since the 1986 amendment to the False Claims Act with whistleblowers earning roughly 10%, or nearly half a billion dollars, for their actions. Government sources estimate that Medicare fraud, Medicaid fraud, and other scams on government-sponsored programs cost the government tens of billions of dollars every year.

Qui tam whistleblowers receive money awards for exposing any of a number of unethical practices for fraudulent spending of government money. This list includes:

- Billing for supplies/equipment never ordered or used (often in cases where substandard equipment is used)
- Upcoding/Padding (fraudulent misreporting treatment performed, such as for a name brand drug when a generic was used)
- Unbundling (fraudulent separate billing for services that are part of a package)
- Creation of fraudulent insurance companies
- Creation of fraudulent employee health care or saving plans
- Double billing (charging twice for the same equipment or service)
- Unnecessary/Inappropriate services performed
- Phantom billing (fraudulent billing for tests or services not performed or for employees or work hours that do not exist)
- Waiving patient co-payments

Medical institutes who historically defraud the government include all areas of health care: nursing homes, hospitals, EMS services, doctors, chiropractors, psychiatric hospitals, pharmacies, and laboratories. The Department of Justice maintains that these corporate frauds are rampant and contribute highly to the substandard care in American nursing homes and other care facilities.

Taking Confidential Action with Qui Tam Whistleblower Lawyer
Qui tam complaints reward only the relator (whistleblower) who first appropriately files the fraud. Even if another person uncovers the fraud, only the whistleblower filing first with a qui tam attorney is entitled to share in the government’s recovery of fraud damages.

The False Claims Act amendment of 1988 protects a qui tam whistleblower from harassment and retaliation from the employer. If retaliation does occur, the whistleblower can be awarded damages, including two times the amount of back pay, reinstatement, and attorney fees. Qui tam laws also protect the identity of the whistleblower during the initial stages of filing and prohibits the employer from disclosing the existence of the case (including the whistleblower’s identity) to anyone during litigation.


Lawyers for Change.
Time works against the qui tam whistleblower. If you know about fraud, report it to the Consumer Justice Group today. We have lawyers across the nation specializing in False Claims law who protect our clients from employer retaliation while working to win whistleblowers awards for taking appropriate action in reporting corporate fraud of the government and taxpayers.


The Workers' Rights News is a service of the Consumer Justice Group.

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