Asserting a Qui Tam Claim

Did you know you can obtain high rewards if you have evidence of fraud against the government by your employer? By asserting a qui tam claim, whistleblowers can take a stand with government protection.

Gardner Employment Law can give you invaluable legal advice on whistleblower cases. If you think you might have a qui tam claim, give us a call.

What is a Qui Tam Claim?

A qui tam claim (pronounced “kee tam”) is a lawsuit filed by an individual on behalf of the government.  “Qui tam” literally means “in the name of the king.”   The qui tam claim was created at the height of the Civil War to combat fraud committed against the United States Army. Today, employees can assert a qui tam claim under the False Claims Act and report fraud committed by another against the federal or state government through a confidential claim. The person who brings the action, usually based on insider knowledge, is called the “relator.”

Qui tam cases can reap massive rewards. If the government decides to prosecute the claim, the relator can receive 15-30% of the government’s recovered damages. A study published back in 2007 in the Boston University Law Journal found that the average recovery for a qui tam relator in a successful case at that time was over one million dollars.  

A qui tam whistleblower files the lawsuit anonymously in a sealed court file. Next the government investigates the claim. The relator’s name remains anonymous until the federal government decides whether to prosecute the case. The government usually will decline to prosecute the case if the initial investigation does not yield enough evidence indicating fraud. If that happens, you can still pursue the case in your own name. Regardless, you will need an attorney to review the facts before you file the lawsuit to advise you on the procedures of a qui tam action and your rights.

What Types of Facts Support Filing a Qui Tam Claim?

There are several types of fraud which constitute a qui tam claim under the False Claims Act, or 31 U.S.C. §§ 3729-33. Some examples include:

• Charging the government for more than was provided;
• Fraudulently seeking a government contract;
• Submitting a false application for a government loan;
• Submitting a fraudulent application for a grant of government funds;
• Demanding payment for goods or services that do not conform to contractual or regulatory requirements;
• Requesting payment for goods or services that are defective or of lesser quality than were contracted for;
• Submitting a claim that falsely certifies that the defendant has complied with a law, contract term, or regulation;
• Attempting to pay the government less than is owed.

These types of fraud typically mean money was stolen from persons who actually need it. With enough evidence that the fraud actually occurred, the government usually will prosecute these claims to recover money. 

When Should a Qui Tam Claim Be Filed?

There is a deadline for filing a qui tam claim. If you witnessed fraud being committed or you have evidence that the fraud occurred, you have until 10 years after the fraud occurred to file a claim. After 10 years, the claim will be barred. 

In Cochise Consultancy, Inc., Et Al. V. United States Ex Rel. Hunt, Billy Hunt knew that two defense contractors were defrauding the federal government by submitting false payment claims for providing security services in Iraq. The Supreme Court reversed a district court decision because Hunt had filed the qui tam claim before 10 years had elapsed, even though the government decided not to prosecute the case. This Supreme Court opinion cemented the right to file a claim until at least 10 years after the fraud occurred, regardless of whether the government intervenes in the case or not.

The High Costs and High Rewards of a Qui Tam Claim

The qui tam process requires a lot of secrecy and discipline to win. As the New Yorker reports, Dr. Darren Sewell uncovered Medicare fraud at his company, Freedom Health. Dr. Sewell, a vice president, was the third highest ranking employee at the company. During his time there, he witnessed several instances of fraud. He had evidence of the company manipulating its enrollment records to drop elderly people who required a lot of care. Dr. Sewell alleged that the company encouraged retention of younger patients who required less care. The company allegedly gave bonuses to sales agents who dropped sicker people off their enrollment rolls.

Once Dr. Sewell became aware that his company might be committing Medicare fraud, he contacted a lawyer. The government prosecuted the case. After the government joined the case, Dr. Sewell had to collect information on the company while he was being guided by the FBI. Dr. Sewell remained employed and collected information through wiretapping and other covert methods. While this investigation was ongoing, Dr. Sewell had to maintain secrecy and not tell anyone about the proceedings. Since anonymity and secrecy is crucial to collecting evidence, he had to keep the entire matter under wraps, which was difficult.

Once the case became public when court unsealed the court documents, Dr. Sewell suffered harassment at work. Although the False Claims Act prevents employers retaliating against employees for reporting fraud, Freedom Health found ways to make Dr. Sewell’s work life miserable. He recounted how the company locked him out of his computer, preventing him from doing his work, and even confiscated his personal laptop. He was placed on administrative leave, and he resigned shortly after. Considering the behavior he endured at work, Dr. Sewell likely could have pursued a retaliation case but did not. 

Darren Sewell’s case took 7 years to yield results. Unfortunately, Dr. Sewell died from an unrelated accident before the case ended. Freedom Health denied the allegations and settled the case. As a result, Dr. Sewell’s family was able to receive $3.2 million when his brother finished the case on his behalf. Darren Sewell’s story demonstrates how qui tam lawsuits can be intense and difficult, but can also reap high rewards.

How Do I Assert a Qui Tam Claim?

If you believe you have a qui tam claim, you must collect as much evidence as possible. It is imperative that you have evidence of fraud so you have a strong factual foundation for your claims. When you collect evidence, try to find information to answer the following questions:

• Who committed the fraud or violation? 
• Who knows about it?
• What fraud or violation took place?
• Where and when did the fraud or violation happen?
• How was the violation or fraud committed? 
• Is the fraudulent conduct ongoing?
• How does fraud or violation harm the public?

Once you collect evidence, contact a law firm about pursuing a qui tam claim. Be sure to seek out a firm that knows how to handle qui tam claims. Note that sometimes dishonest people pursue a false or fraudulent claim. So the evidence that you collect is important for the attorney to understand that your case is well-founded and credible.

What Are the Qui Tam Procedures?

Once you have a law firm willing to take on your case, remember that secrecy is paramount. If you do file a qui tam claim, the court will seal all of the documents. Your name will not be revealed at that time. The government will make decisions about how the investigation will be pursued. In the meantime, it is a waiting game to ensure that your cover is not blown. Do not tell anyone other than your attorneys about the potential case, as you don’t want to suffer any adverse action. 

The benefit of qui tam cases is the anonymity that remains until the government has completed its investigation and made the decision whether to intervene or not. You will remain anonymous until the government’s decision is official and the court makes a ruling that the court documents will be unsealed. 

If the government decides to prosecute the case, you will be involved in helping gather more evidence for the government, as Dr. Sewell did. If the government decides not to pursue the case, you can ask the court to dismiss the case. Even then, you can request that the court keep your identity confidential. 

While a qui tam claim can involve risk, when the claim is handled discreetly, the case can yield massive rewards. I know an attorney who represented a client in a qui tam case. After the case was concluded and the fees were dispersed, the attorney was able to build a beautiful house in an affluent part of Houston. If the relator paid his attorney only a percentage, you can imagine how much the relator recovered.

Qui tam claims protect the public’s greater interest and tax money. As seen from Dr. Sewell’s case, it can also prevent public health harm and schemes. According to Malcolm Sparrow at Harvard, “unchecked fraud could lead to the wholesale destruction of government health-care programs.” It is important that employees consider pursuing a qui tam claim if there is valid evidence of fraud or illegal activity against the government at work.

Contact Us if You Have a Potential Qui Tam Claim

We are experts in the whistleblower arena. We can discreetly file a qui tam action on your behalf. If you have evidence of a potential qui tam claim, let us know.