In 1863, the Federal Government created the False Claims Act (FCA) in order to combat defense contractor fraud against the federal government during the Civil War. The False Claims Act permits a whistleblower to file a lawsuitto expose the wrongdoing against the federal government. To incentivize whistleblowers to expose fraud against the federal government, whistleblowers are rewarded with a percentage of the settlement or judgment obtained against the wrongdoer.
In 2021, the Department of Justice obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2021 – the second largest annual total in False Claims Act history. From this amount, the government paid out $237 million to the whistleblowers who exposed fraud.
Types of Whistleblower Lawsuits
There are many types of whistleblower cases, but historically, most fall into three categories: (1) healthcare and pharmaceutical fraud; (2) defense/government contractor fraud; and (3) financial industry fraud. However, since 2020, the federal government has also had an interest in combatting fraud related to the COVID-19 pandemic.
Fraud against the government can take on many forms, including:
- Government contracting, military and defense contracting, where the wrongdoer:
- Falsely certifies compliance with statutes and regulations
- Delivers goods to federal government entities or agencies in violation of inspection, testing or other technical requirements,
- Bills the government for products for which cheaper/inferior parts were used;
- Medicare and Medicaid program fraud, such as
- Taking kickbacks in exchange for referring patients for certain services or prescribing certain medications, in violation of the Anti-Kickback Statute
- Billing Medicare and Medicaid for phantom patients, services that were not rendered or services that were not medically necessary
- Financial aid/higher education fraud, such as making false statements to obtain student federal grants and loan or research grants
- Financial fraud such as making false statements to obtain FHA and HUD loans
- COVID-19 relief fraud, such as making false statements to obtain money through the Paycheck Protection Program, Small Business Administration, or Economic Injury Disaster Loan program.
How Is The Whistleblower Rewarded?
Whistleblower claims filed under the False Claims Act have resulted in substantial recoveries for the United States and the whistleblowers. Under the False Claims Act, the whistleblower is usually entitled to a share of the recovery in the amount of 15-25% of the settlement or judgment.
False Claims Act Quick Facts
There are a few requirements in order to file a a lawsuit under the False Claims Act:
- The fraud must involve federal government funds
- A whistleblower must be represented by counsel
- A whistleblower must be the “first to file” to qualify for a whistleblower reward. The case is initially filed under seal, which means the wrongdoer will not know that it has been filed until the seal is lifted.
- Filing a case under seal and without notifying the wrongdoer enables the government to investigate the claims before the wrongdoer becomes aware of them.
Sumner Schick has successfully recovered millions of dollars for its whistleblower clients. Our attorneys have decades of experience navigating the complexities of whistleblower cases and the laws that govern them. Sumner Schick prosecutes False Claims Act whistleblower cases on a contingency fee basis, which means there is no upfront cost to you. If your case is successful, Sumner Schick receives a percentage of the settlement or judgment as its fees. If there is no recovery, there is no cost to you.
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