What Is Qui Tam?
Qui tam is a provisions of the False Claims Act (FCA) allowing whistleblowers to report fraud on behalf of the US government and receive a share of the recovered funds. Fraud includes abuse of disaster relief loans, over billing, kickbacks, false statements, and upcoding in healthcare, among many others.
Whistleblowers, also known as qui tam relators, can earn 15-30% of the funds recovered by the government if they decide to intervene. The FCA is considered one of the strongest whistleblower laws, having paid over $7.3 billion in rewards since 1986. In fact, many other whistleblower programs have been modeled around the False Claims Act and qui tam provision because of it’s effectiveness in bringing government fraudsters to justice.
The FCA is codified as 31 U.S.C. §§ 3729-33 with anti-fraud requirements in 3729 and qui tam provisions in 3731. Continue reading to learn more about qui tam and your rights as a whistleblower.
- Qui tam is the abbreviation for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “Who sues on behalf of the King as well as for himself.”
- A False Claims Act whistleblower can receive between 15 and 30 percent of the total recovery the U.S. gets from the defendant. Since 1986 approximately $7.3 billion has been paid in whistleblower rewards.
- Under Section 3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or otherwise retaliated against for taking actions to promote the purposes behind the FCA, can file an employment discrimination claim in federal court.
- The statute of limitations for a qui tam action is either six years after the date from when a fraud was committed; or three years beyond the date which the United States should be aware of the “material facts,” – but this should not exceed 10 years.
- It is not unusual for qui tam cases to remain under seal for an extended period, even for multiple years. The government is typically required to file periodic reports with the district court explaining the reasons for extending the seal.
Qui tam definition and pronunciation
What does qui tam mean? The word qui tam is pronounced “kee tam,” or often also pronounced as “kwee tam,” which means “in the name of the king.” Under the False Claims Act, qui tam allows persons and entities with evidence of fraud against federal programs or government contracts to file a qui tam lawsuit against the wrongdoer on behalf of the United States Government. Read Stephen Kohn’s testimony on qui tam rewards under the False Claims Act before the House Oversight Committee: “Restoring the Power of the Purse: Legislative Options”
Examples of government contracting fraud
A qui tam lawsuit can be filed by any individual who has knowledge of false or fraudulent claims being submitted to the government for payment. The most common types of government contracting fraud include illegal billing schemes and over-billing, the substitution of inferior equipment, and lack of quality control. Below is a short list of the most common types of fraud in which qui tam actions are filed:
- Overbilling the government for more than was provided;
- Fraud in obtaining a government contract;
- Providing defective goods to the government;
- False statements on customs forms;
- False statements to get a government lease;
- Failure to comply with government contracts or leases;
- Failure to pay monies owed to the government;
- Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment;
- Conspiring with others to get a false or fraudulent claim paid by the federal government;
- Knowingly using (or causing to be used) an invalid record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.
Under the qui tam provisions of the FCA, a private citizen can file a complaint in federal court alleging fraud against the government, which directly or indirectly implicates taxpayer dollars. In addition to government contracting fraud, the FCA whistleblower law also extends to other industries where government monies are involved and programs violated under the False Claims Act.
These types of fraud include:
- Healthcare Fraud: Medicaid and Medicare Fraud committed by doctors, hospitals and other types of medical care facilities; Unnecessary medical procedures billed to Medicaid or Medicare, such as upcoding; Illegal marketing of drugs by pharmaceutical companies;
- National Defense Fraud: Defense contract fraud, where funds are shifted from one contract to another to profit, or the intentional inflation of costs;
- Education & Financial Aid Fraud: For-profit colleges and universities violate the rules of the student loan programs improperly recruiting students to generate income;
- Bank & Mortgage Fraud: Bankers submitting fraudulent claims for government insurance based on wrongful foreclosures;
- Underpayments to Government: A reverse false claims action can occur when defendants knowingly make a false statement in order to avoid having to pay the government when payment is otherwise due.
False Claims Act cases in which the government intervenes successfully obtain a recovery around 95% of the time, while that number drops dramatically in non-intervened cases. If you have knowledge of government contract fraud and need a whistleblower advocate to help you with your case, contact us for a free and confidential consultation.
Qui tam rewards
The False Claims Act qui tam provision incentivizes whistleblowers to give the government the best evidence, related to the biggest frauds.
A False Claims Act whistleblower can receive a whistleblower reward of between 15 and 30 percent of the total recovery the U.S. gets from the defendant. The other award programs offer between 10 and 30 percent, depending on the sanction amount. The Dodd-Frank Act, Securities Exchange Act, IRS Whistleblower Reward Program, Commodity Exchange Act and Foreign Corrupt Practices Act all have provisions for the mandatory payment of whistleblower rewards to qualified whistleblowers.
There are no “caps” on awards; the value of the information the whistleblower provides serves as the basis for the award’s amount: The better the information provided, the larger the sanction. The larger the sanction, the larger the reward. The government is required to make these payments. If the government refuses to pay the requisite reward, you can challenge that denial in court.
Protection for False Claims Act qui tam whistleblowers
Section 3730(h) of the False Claims Act states that any employee who is discharged, demoted, harassed, or otherwise retaliated against for taking actions to promote the purposes behind the FCA, can file an employment discrimination claim in federal court.
This action can be presented as part of a qui tam reward case or as a stand-alone cause of action. The law provides for a jury trial and full “make whole” relief, including reinstatement, double back pay, and compensation for any special damages, including litigation costs and reasonable attorneys’ fees.
Qui tam statute of limitations
The statute of limitations for a qui tam action is either six years after the date from when a fraud was committed; or three years beyond the date which the United States should be aware of the “material facts,” – but this should not exceed 10 years. The statute of limitations for a False Claims Act whistleblower retaliation case is three years.
In Cochise Consultancy Inc. v. United States, ex rel. Hunt, Kohn, Kohn and Colapinto presented an amicus curiae in a case filed to the Supreme Court on behalf of a qui tam whistleblower. Justices unanimously ruled in favor of whistleblowers, finding that a ten-year statute of limitations is applicable to whistleblower-initiated claims when under specific conditions. This decision was a significant victory for whistleblowers under the False Claims Act.
Keep in mind, every law has its own rules and regulations governing the filing a qui tam lawsuit or a request for a reward. These procedures are very technical. Failure to file a timely claim following the specific procedures outlined in each law can result in an otherwise qualified whistleblower losing his or her right to a reward.
Filing qui tam lawsuits (“actions”)
The partners at Kohn, Kohn & Colapinto law firm have been using the False Claims Act law qui tam provisions to file qui tam lawsuits on behalf of whistleblower clients for over 30 years. We help clients safely and confidentially navigate the complex process of filing an action, while offering confidentiality and protection throughout the entire process.
The process of filing a qui tam lawsuit and process is as follows:
- A complaint, known as a qui tam action, is confidentially filed under seal in federal district court following the federal rules of Civil Procedure.
- At the same time, a copy of the action with written disclosure statement of substantially all material evidence must be confidentially served to the U.S. Attorney General.
- Qui tam relators filing a qui tam action must also comply with other requirements of the law, such as confidentially filing an action under seal, and being the first to file.
- Relators then wait until the United States decides to “intervene in the case. If so, the case is taken out of seal and filed on the public docket.
- Once the seal has been broken, a whistleblowers identity is no longer confidential. However, the whistleblower can ask the court to keep his or her identity confidential.
- If the United States intervenes, they will take over the litigation and proceed to prosecute the fraudster, with the whistleblower as a party in the case.
- If the intervention is declined, the whistleblower has the right to proceed with the lawsuit. However, the results are slim that he or she will win without the US.
- Those who submit claims may also run the risk for possible sanctions for misconduct if the claim is frivolous and unwarranted.
It is not unusual for qui tam cases to remain under seal for an extended period, even for multiple years. The government is typically required to file periodic reports with the district court explaining the reasons for extending the seal. Some cases resolve relatively quickly while other cases move to full litigation and may continue for several years before final decision or settlement.
What happens after a qui tam lawsuit is filed?
Once a qui tam lawsuit is file, the complaint is sealed for 60 to 120 days and is reviewed by the Department of Justice. During this time, the government will decide whether to intervene and take over the case. If they choose to decline, the whistleblower may continue with the case on their own. However, if the government chooses to pursue the case, it takes control of the lawsuit and the whistleblower may be eligible to receive a portion of any recovery. It’s important to know that the defendant may file a motion to dismiss or otherwise challenge the lawsuit. The lawsuit may also proceed to discovery, trial, and settlement or judgment.
Hiring us: experience you can trust
For over 30 years, Kohn, Kohn & Colapinto LLP has been considered one of the nation’s leading law firms, specializing in representing whistleblowers in “qui tam” lawsuits under the False Claims Act.
We have a proven track record of recovering billions for the US Treasury and our partners are experienced and recognized experts in this field. In fact, founding partner Stephen M. Kohn has published seven books on whistleblowing, many of which are referenced in qui tam and non-qui tam cases around the world.
The firm has been involved in numerous high-profile cases and its lawyers are frequently quoted in major media outlets, including Bloomberg, Financial Times, and The Wall Street Journal. Several of the firm’s cases have also profiled on 60 Minutes and other documentaries.
If you have information about government fraud, contact us for a confidential case review.
Our qui tam cases
Daniel Richardson is a former Senior District Business Manager for Bristol-Myers Squibb (BMS). Richardson prevailed in one of the largest qui tam whistleblower cases filed against a major pharmaceutical company for “off label” marketing and illegal kickbacks. Richardson, in conjunction with other whistleblowers, held BMS accountable under the False Claims Act.
Based on frauds primarily related to federal and state Medicare and Medicaid programs, the company had to pay $515 million in fines and penalties. The whistleblowers, including Mr. Richardson, obtained their mandatory qui tam whistleblower rewards, once again demonstrating how the whistleblower reward laws are the most powerful tool for holding fraudsters accountable.
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February 27, 2023
On February 23, Kohn, Kohn & Colapinto (KKC), on behalf of the National Whistleblower Center (NWC), filed an amicus curiae brief in the Supreme Court case U.S. ex rel. Schutte v. SuperValu Inc. Referencing historical materials pulled from the National Archive, the brief argues that the Congressional intent behind the False Claims Act was to hold fraudsters liable based on the ...
February 8, 2023
In the 2022 Fiscal Year (FY 2022), the U.S. Department of Justice (DOJ) recovered only $776 million in False Claims Act (FCA) whistleblower cases in which it intervened, the lowest total since 2004. In contrast, FCA whistleblower cases where the DOJ did not intervene resulted in a record $1.1 billion in recoveries, ...
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On December 6, the U.S. Supreme Court heard arguments in United States, ex rel. Polansky v. Executive Health Resources, Inc. The case concerns the issue of whether or not the U.S. government can dismiss False Claim Act whistleblowers' qui tam suits after initially declining to intervene in them. According to whistleblower attorneys, the case has tremendous implications ...
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Frequently Asked Questions
Qui tam, pronounced “kee tam” or “kwee tam,” translates into “in the name of the king.” The False Claims Act Qui Tam provision permits individuals with evidence of fraud against the US government to file a lawsuit against the fraudster on behalf of the US government.
A qui tam action is a lawsuit against an individual or entity engaged in state or federal government contract fraud schemes. Schemes may include overbilling, kickbacks, false statements on customs forms, providing defective goods to the government, false statements to get a government lease, and many other contract abuse.
A qui tam relator is an individual who file a qui tam action (lawsuit) on behalf of the US government. This term is effectively the same as “whistleblower” and is used primarily in reference to qui tam cases.
Many qui tam attorneys work for a “contingency” fee. In a contingency fee case the clients do not pay any attorney’s fees. If the whistleblower loses his or her case, they do not owe the attorney any money. If the whistleblower wins the case, the contingency payment for the attorney is generally between 30% and 40% of the award.