The False Claims Act, passed in 1863 to combat rampant fraud committed by government-contracted individuals and companies, is today the federal government’s most powerful tool in fighting fraud, waste, and other wrongdoing. Every year this type of fraud amounts to billions of dollars in lost taxpayer money.
The FCA’s qui tam “whistleblower” provision, which allows people not affiliated with the U.S. government to file lawsuits on behalf of the government when they witness fraud, gross waste, mismanagement, abuse of power, and other wrongdoing representing a substantial financial loss or threat to public health and safety.
Because whistleblowers take giant personal risks when they choose to expose fraud, often facing demotion, termination of job, and other forms of retaliation, the FCA awards plaintiffs who file lawsuits on behalf of the government. They may collect 15-30 percent of the recovery.
The most common type of whistleblower lawsuit involves defrauding the U.S. government by overcharging for goods and services.
Many whistleblower protections have been strengthened under the FCA and other laws, such as those governing securities fraud under the Securities and Exchange Commission (SEC), and tax fraud under the Internal Revenue Service (IRS).
Whistleblower laws often have the added advantage of empowering employees to police operations and transactions from the inside, which is almost always more effective and affordable than relying on federal regulatory officials to find and correct waste, fraud, and other wrongdoing.
If you have any questions regarding these type of claims or a particular circumstance you are in give me a call (423) 265-8804.