As most Americans are finding out, in recent years corporate fraud in the United States has reached unprecedented heights and devastated millions of lives. Given the countless examples of corporations cheating individuals out of their life savings, there is good reason for the distress and outrage felt by Americans. And to make matters worse, consider the rising number of cases where corporations perpetrate fraud on our government – fraud against every single U.S. taxpayer – which all too often goes undetected. Fortunately, the justice system in this country provides ways to fight back, and one of our most powerful weapons is the qui tam action, which we have mentioned in prior issues.
A qui tam action involves a private party, called a relator, who asserts claims on behalf of the government. Although the government is considered the real (named) Plaintiff, if the action is successful, the relator receives a share of the award. Most qui tam actions are brought under the federal False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq., although many states have adopted their own False Claims Acts. The successful results speak for themselves – over $34 billion in recoveries since 1986 – and that tells us a powerful story.
Qui tam actions typically begin with an employee witnessing his/her employer defrauding the government. The employee may later consult with an attorney on another matter, but convey their knowledge of false information being given to the government. Attorneys need to be on the lookout for such information and recognize potential claims.
It takes vigilance and courage for these private individuals, commonly referred to as “whistleblowers,” to report fraudulent activity, but without them the vast majority of fraud against our government would go undetected. Recognizing the perils faced by whistleblowers, legislators have passed laws protecting individuals who take a stand against fraud. Specifically, 31 U.S.C. § 3730 prohibits discrimination and retaliation against whistleblowers and imposes strict penalties, including double back pay with interest, on violators.
As we have written previously, if a qui tam action is successful, the whistleblower receives between 10% and 30% of the government’s recovery. Damages under the FCA include penalties and “3 times the amount of damages which the Government sustains” due to the fraud. 31 U.S.C. § 3729(a)(1)(G). In short, the law protects and rewards whistleblowers for their instrumental role in exposing and prosecuting fraud. Lawyers in our firm have waged war against corporate fraud for over 30 years and would welcome the opportunity to assist with any qui tam actions that any of our readers may have. If you need more information on this subject, we will be glad to help and look at any potential cases. You can call 800-898-2034 or email Chad.Stewart@beasleyallen.com or Andrew.Brashier@beasleyallen.com.
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