Qui tam is a provision of the False claims Act (FCA), which provides financial incentives to government whistleblowers who bring action against a person or company on behalf of the U.S. government.
If the government decides to intervene in a case, they are considered the plaintiff and the whistleblower is called the relator. Relators are eligible for an award of between 15 and 30 percent of the sanctions collected from the recovery – amounts vary depending on the information submitted. Since 1986, over $7.3 billion in whistleblower rewards have been paid, and continues to climb as more whistleblowers come forward with information about the most egregious frauds.
Frauds include kickbacks, overbilling, providing defective goods, false statements on customs forms, or failure to pay monies owed to the U.S. government. However, can also include abusing federal and state disaster relief loan programs and upcoding, which happens when a healthcare provider submits false codes to Medicaid, Medicare, or private insurers with procedures or diagnosis much more serious than what they actually provided or treated.
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” and is considered one of the strongest U.S. whistleblower laws in existence. 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.
Read the Law
The False Claims Act is codified as 31 U.S.C. §§ 3729-33. Section 3729 sets forth anti-fraud requirements of the Act, and 31 U.S.C. 3731 includes the provisions related to filing a qui tam lawsuit.
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
Government contracting fraud misuses taxpayer money and can put lives at risk. 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;
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.
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.
Any whistleblower who believes they may have original information covered under a reward law should carefully read the following Rules for Whistleblowers from The New Whistleblower’s Handbook, and seek professional legal advice.
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.
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Whistleblowers Change The World
The firm’s qui tam cases have resulted in the U.S. government recovering hundreds of millions of dollars stolen each year from American taxpayers. If you believe you have knowledge of contracting fraud or violations against the government, you have the legal right to act by filing a qui tam lawsuit to stop the fraud. Through these actions, our team can help you obtain substantial whistleblower rewards and further transparency.
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 for the efficacy of the False Claims Act. “All of the Justices’ questioning at oral argument appear to be deferential to the government’s position that the DOJ can dismiss a case that it did not initially intervene in,” said whistleblower attorney David Colapinto, a founding partner at the qui tam firm Kohn, Kohn & Colapinto. “However, the Court is struggling with what standard, if any, should be applied by courts at a hearing on the government’s motion to dismiss a whistleblower’s False Claims Act suit, years after the government has declined to intervene in the case.” "During the oral argument the government took the position that it’s just 'too bad' if the whistleblower has spent 'a ton of money' and years litigating the False Claims Act suit. That was brushed off as a reasonable risk that every whistleblower takes when filing suit," continued Colapinto, who has represented False Claims Act whistleblowers since the 1980s. "This turns the False Claims Act statute on its head. Congress created the right of a whistleblower to bring these suits without the government to protect the taxpayers." “If the ...
A major False Claims Act (FCA) qui tam case is heading to trial that pits a large defense department contractor, OST, Inc., and its sole owner, Vijay Narula, against a lone whistleblower, Andrew Scollick. Scollick blew the whistle to the government alleging that $7 million in construction contracts that were supposed to be awarded to Service-Disabled Veteran-Owned Small Business (SDVOSB) instead went to a newly formed construction company controlled by Narula. Under the FCA, defendants are subject to treble damages (in this case, three times the value of contracts that were awarded). The government may also disbar a company found guilty of a FCA violation, meaning that OST could be barred from obtaining additional government contracts for a period of up to three years. On July 29, 2022, in Scollick v. Narula, et al., Case No, 1:14-cv-01339-RCL, the United States District Court for the District of Columbia unsealed its legal opinion denying Narula’s and OST’s motions for summary judgment. This ruling clears the way for the case to go to a jury. An earlier ruling in the case garnered much attention because it established for the first time that construction bonding companies could be held liable for defrauding the government if they had reason to know the entity they were bonding was not actually majority-owned and controlled by a service-disabled veteran. While the latest ruling dismissed the bonding defendants because they claimed to lack actual knowledge of the SDVOSB ...
This article was originally published in JD Supra. On June 21, the U.S. Supreme Court granted certiorari in United States, ex rel. Polansky v. Executive Health Resources, Inc. The Court agreed to hear the case which 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. The case also concerns what standard applies to such a dismissal if the DOJ does have such authority. There is currently a clear and intractable conflict in the circuits on this important statutory question. Under the False Claims Act, individual whistleblowers may bring qui tam lawsuits against fraudsters on behalf of the U.S. government. The Department of Justice (DOJ) has the opportunity to intervene in qui tam suits and take over the proceeding. However, when DOJ declines to intervene in and litigate the qui tam case the statute permits the whistleblower to pursue the case in the name of the United States and to litigate the case against the defendant in federal court. In instances where the DOJ does initially intervene, it has the authority to dismiss the suit by giving the whistleblower notice of a motion to dismiss and the opportunity for a hearing on the motion. The Supreme Court will resolve whether DOJ’s dismissal authority extends to cases in which the DOJ initially declined to intervene but later seeks to intervene to dismiss the whistleblower’s suit. False Claims Act whistleblowers have ...
In addition to these highly effective laws, Congress recently enacted an Auto Safety Whistleblower Reward law and is considering strengthening the wildlife/seafood/lumber-importation whistleblower reward laws. There is also a qui tam whistleblower reward law for seamen who report ocean pollution on the high seas.
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.
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