Employment Lawyers serving Roanoke, Lynchburg, and Central & Southside Virginia
False Claims Act, Virginia Fraud Against Taxpayers Act, whistleblower, protected activity, retaliation, relator, qui tam, white collar fraud.
Chris Collins, white collar fraud attorney and former math teacher, explains how pyramid schemes are structured, how people are enticed to join, and why the vast majority of people who join become victims.
Mia Yugo, head of our White Collar Fraud and Whistleblower Claims divisions, discusses fraud schemes employed in Inventing Anna, how they trigger criminal liability, and the interplay between criminal fraud and civil fraud under the False Claims Act.
The False Claims Act ("FCA") is the federal government’s primary anti-fraud tool for recovering payments made for false claims submitted to government agencies or programs. Under the FCA, a person or company that has defrauded the government must pay triple the actual damages, plus civil penalties. From 1986 through fiscal year 2017, the Department of Justice recovered over $56 billion, over $40 billion of which was from FCA whistleblower cases brought under the qui tam provisions.
The FCA only covers fraud against the federal government. Typical FCA cases involve:
· Healthcare Fraud
Common Example: A home healthcare provider, hospital chain, nursing home facility, physical therapist, dental office, etc. that double or triple bills Medicare or Medicaid. Healthcare fraud can be committed in a variety of ways, including:
using incorrect CPT codes to arbitrarily inflate billing;
· Military Procurement Fraud
Common Example: A private company that contracts with the federal government to build a certain type and quality of military equipment but then intentionally cuts corners and does not build what was promised, without telling the government or receiving permission to modify the terms of the deal.
· Research or Grant Fraud
Common Example: A college or university researcher who misrepresents the nature of his or her research or his or her background or qualifications in order to obtain a National Science Foundation (NSF) grant under false pretenses.
Each state has its own state-specific fraud statute, which usually mirrors the federal False Claims Act. In Virginia, for example, the Virginia Fraud Against Taxpayers Act ("VFATA") is the whistleblower statute that covers fraud committed against the state government, i.e., the Commonwealth of Virginia. Because Medicaid is funded by both state and federal governments, Medicaid fraud triggers both FCA and VFATA claims.
A “relator” is just another word for whistleblower—a person who gets paid for exposing fraud. Pronounce the word as it is spelled, making sure to enunciate the long “a.” A common mispronunciation is saying “realtor.” Think about FCA relators as people who relay information about fraud to the government.
Call a lawyer experienced in identifying fraud and employment law principles for a confidential consultation. The worst thing you can do is engage in the fraud yourself and quitting almost always cuts off your employment-related damages. By contrast, reporting suspected fraud is protected activity (see next section). Our government fraud attorneys can guide you through this process and assist you in reporting what you have observed.
Yes. You can (and most likely will) get fired for complaining about fraud or trying to stop it. However, if the fraud involved is fraud against the government—for example, fraud against Medicaid—your complaints or efforts to try and stop the fraud are “protected activity” under the False Claims Act. These provisions are designed to protect whistleblowers from retaliation by their employer for trying to stop the fraud taking place. Keep in mind, however, that your employer will always have a different story. Even if you complained about the fraud and got fired, your employer will likely have a “file” on you evidencing what they call your “misconduct,” and will use that as a pretext to justify your termination. Successful retaliation cases are possible but each case is highly fact-dependent. The best thing to do is to document everything and seek a confidential consultation before you quit or get fired so that a lawyer can assess the strengths and weaknesses of your case.
Both. People who commit fraud against the government can incur both civil liability (where you get sued for money) and criminal charges (where you can end up in jail). The Department Of Justice ("DOJ") often runs parallel civil and criminal investigations.
Filings are entirely confidential. FCA whistleblowers, aka "relators", initially file their case "under seal," meaning the documents accusing your employer of fraud are filed privately with the Court and served only on the federal government. This means the employer does not know that the whistleblower has filed a lawsuit until the documents are "unsealed," which usually happens about a year or more later.
Because the federal government needs time to quietly investigate the case without tipping off the employer.
The government has to decide whether it wants to (1) intervene in your case, or (2) decline intervention. If the government intervenes in your FCA case, the government will use its own government lawyers to handle the bulk of the litigation. Having the weight of the U.S. government and its resources behind you is a significant advantage for relators.
Not necessarily. It could also mean the government is prioritizing other types of fraud cases or the potential recovery is just not large enough to justify intervention and use of limited government resources.
If the government declines to intervene in your case, you can still pursue it yourself but your own lawyer would have a tremendous amount of work to do--typically hundreds or even thousands of hours of attorney time--and will incur a significant financial risk should you lose at trial. For this reason, many firms will not pursue claims that are declined by the government.
Yes. It is possible and it has happened but most law firms will not pursue a declined case because of the enormous financial risk. All FCA cases require careful assessment of the financial risk and potential reward before any law firm invests hundreds or thousands of hours of attorney time. The upside of winning or settling a declined case means the whistleblower, aka "relator," receives a much larger percentage of the ultimate recovery.
Call a whistleblower attorney who can give you an honest assessment of the strengths and weaknesses of your case. Because of the tremendous risks involved, a proper and thorough FCA assessment up front is critical.
Generally, only the first person to file the case is in line for a whistleblower reward. The second person gets nothing. In other words, if someone else has already discovered the fraud and quietly filed their own FCA lawsuit, you are barred from recovering anything. Exceptions exist where multiple people have unique or different information they can contribute, but act quickly to preserve your place in line!
Yes. Two people can file the same lawsuit together as whistleblowers and will then split the recovery, assuming the lawsuit is successful. The issue with talking to other people at work about the fraud you have discovered is that there is nothing stopping one of your coworkers from quietly finding their own lawyer and filing their own lawsuit separately, before you file. If that happens, your coworker would be the first-to-file instead of you.
Relators can earn between 15%-25% in cases in which the government intervenes and 25%-30% in cases in which it does not. Because FCA awards can reach hundreds of millions of dollars (or even billions), the relator's share can be life-changing. While most awards are less than $1Million, the relator's share is often equivalent to several years' salary, and is often combined with retaliation damages to produce an even larger award.