Qui Tam and Whistleblower Cases
A qui tam case is a type of whistleblower case, in which the private whistleblower is a named co-plaintiff with the government (qui tam is a part of a Latin phrase meaning “he who sues in the name of the king”). The individual plaintiff and their lawyers join forces with government law enforcement in investigating the facts and prosecuting the case. If the case is successful, the qui tam or individual plaintiff (known as the “relator”) is given a share, usually between 15% and 25% of the government’s recovery as a reward. The most common qui tam statutes in use are the federal and state False Claims Acts.
There are other whistleblower laws and programs that provide whistleblowers with a reward but are not qui tam — that is, the whistleblowers do not file an actual lawsuit as a plaintiff. Typically, as with the IRS, SEC, FIRREA, and CFTC whistleblower programs, the whistleblower files a formal tip with the agency rather than filing a lawsuit in court. The government then may choose to investigate and act on that tip and provide a reward to the whistleblower.
Other laws protect whistleblowers who speak out against fraud, waste, corruption and wrongdoing, but provide no direct financial reward. For example, whistleblowers are protected from adverse action based on their reporting of health and safety violations, discrimination or government waste.
For a more complete list of whistleblower statutes and programs, see Whistleblower Laws.
Qui tam cases are initially filed in court under seal and served on the government but not served on the defendant, so the person or company sued is not initially aware that a case has been filed against them and may never know. Filing the lawsuit triggers an investigation by law enforcement and the litigation itself waits indefinitely, often years, until the government’s investigation is complete. Among other things, this allows the government time to review the matter and spares the whistleblower the expense and stress of engaging in open full-blown litigation with deep-pocketed defendants.
During the investigation, whistleblower attorneys work in partnership with the government to try to recover the government’s money. A successful qui tam case often remains under seal until a settlement is announced. In a successful case, a whistleblower shares a substantial percentage of the government’s recovery and often their name is not revealed until after a settlement is announced.
At the end of the government’s investigation, it decides whether it wants to take over the litigation (called intervening). The government may intervene and settle the case before the complaint becomes public, or it may intervene and litigate along with the whistleblower’s attorneys. If the government declines to intervene, the whistleblower has the right to proceed without the government, but this is a complex decision that must be analyzed carefully before proceeding. If the whistleblower decides not to go forward, the case is often dismissed without the complaint becoming a public document.
The False Claims Act is the most utilized whistleblower statute. It was signed by President Lincoln in 1863 during the Civil War to combat rampant fraud on the Union Army. For this reason, it is sometimes called “Lincoln’s Law.”
The False Claims Act prohibits people from knowingly making false or fraudulent claims (i.e., requests) to the government for payment, using false or fraudulent statements material to a false or fraudulent claim, failing to return overpayments from or underpaying obligations to the government, and conspiring to do any of these. This law has been used to fight fraud against the government in many settings including healthcare and other government program fraud.
Anyone who violates the False Claims Act is liable to the government for three times the government’s damages as well as a civil penalty of up to $25,076 per violation. It also provides a reward to the whistleblower/relator of up to 30% of the government’s recovery. Learn more about the False Claims Act.
Yes. Thirty U.S. states, a handful of cities, and some territories (including Puerto Rico), have adopted their own false claims acts, which generally are substantially similar in structure to the federal False Claims Act. These statutes protect state, city, or territorial money, and are often invoked in cases involving Medicaid fraud, where both state and federal dollars are at issue. A list of the states and cities with FCA statutes, or laws closely resembling them, can be found here.
Whether a whistleblower can remain anonymous depends in large part on the particular whistleblowing program. For example, some programs like those of the SEC, IRS, and CFTC provide for anonymous filing and total confidentiality even if the agency litigates against the defendants and provides a reward to the whistleblower. However, defendants frequently spend some time and energy trying to figure out who blew the whistle on them.
False Claims Act complaints are initially filed under seal in the name of the whistleblower and the complaint will describe the whistleblower and explain how they came to know of the information therein. The complaint typically remains under seal for a long period of time and during that time is not disclosed to the public and is typically not shared with the defendant. However, the whistleblower cannot keep their identity secret from the investigating government law enforcement personnel. Moreover, if the case is successful, the whistleblower’s identity may become known at least to the defendant at the time of settlement. As noted above, if the government declines the case, the whistleblower will have a choice whether to dismiss the suit or proceed, in which case their name will likely become public.
We work with clients closely on this decision, both at the filing stage and at later stages. We have some options we have successfully used to protect a relator’s identity, and we recognize that the question of whether to disclose one’s identity can influence a client’s decision on how to proceed.
If you believe you may have a case and are concerned about your identity becoming known, you should talk with an experienced whistleblower attorney about the likelihood of disclosure and review the options to protect your identity.
No. So long as you know about a fraud, it does not matter whether you are a citizen of or are in the United States. It also does not matter whether the company or person committing fraud is in this country so long as the fraud involves an activity protected by a whistleblower statute, such as fraudulent bills submitted to the U.S. government, U.S. tax evasion, or securities and commodities fraud related to U.S. regulations.
Whistleblower Law Collaborative
We are a law firm based in Boston with national scope, comprising six attorneys all of whom are former prosecutors. We have over 64 years of prosecutorial experience as either Assistant U.S. Attorneys or state Assistant Attorneys General. Learn more about us here.
The most important factor in the success of a case is whether the government chooses to intervene. As former prosecutors, we understand from direct experience what the government is likely going to care most about. We understand how prosecutors think and the kinds of evidence they will find compelling. Our rigorous screening of cases — based on this experience — gives our cases credibility with the government. In addition, our contacts with government lawyers all over the United States help us choose the right district in which to file.
Knowing which U.S. Attorneys have the right mix of expertise, motivation, and availability is a vital component of a case’s success. Our attorneys have practiced law in Boston, Baltimore, Washington, D.C., San Francisco, New York, Seattle, and Detroit, which puts us in an advantageous position to know this landscape as well or better than any firm in the country
Our attorneys are experienced in both criminal and civil law. This is important because whistleblower cases frequently implicate enforcement action by both civil law enforcement mechanisms (e.g., lawsuits for damages) and criminal law enforcement mechanisms (e.g., search warrants and indictments). Knowing how both criminal and civil investigations operate and how they can overlap with each other is part of the expertise that we bring to every case.
As noted above, the most important factor in the success of a case is whether the government chooses to intervene. We have a well-earned reputation with government prosecutors that the cases we file are serious and worth their time to investigate. We believe that this reputation continues to pay dividends by helping to ensure that our cases get the consideration and attention they deserve.
As of the end of 2018, our cases have helped the federal and state governments collect over $6.5 billion dollars, and our clients have been awarded hundreds of millions of dollars. We have filed cases under numerous federal whistleblower programs and dozens of state laws. Our successful cases range from record-setting pharmaceutical settlements to smaller recoveries in cases involving a wide variety of fraud schemes.
We do not charge clients by the hour; we take our cases primarily on contingency. That means should your case recover money we would be entitled to a portion of it, as well as the right to seek fees directly from the defendant should the statute or program permit it. If your case is not successful you generally would owe us nothing.
Yes, this is what we do. For a confidential case review, please contact us.
Finding and Selecting a Lawyer
Under some statutes, such as the False Claims Act, you cannot bring a case by yourself (known as filing pro se) and instead must hire an attorney. Other whistleblowing programs, such as those of the SEC, CFTC, and IRS, do not require you have a lawyer. However, having a lawyer significantly improves your chances of success in bringing a claim under these program. Learn why this is so.
Our core function is to advise a client about their options. Potential clients usually know about wrongdoing but they may not know much or anything at all about what they can do about it. We have a deep understanding of the powers and limitations of whistleblower programs and can help a potential whistleblower understand the risks and rewards of reporting wrongdoing through them. Sometimes, even though a client may have a great potential claim, they decide that the risks of a being a whistleblower outweigh the potential benefits. Helping clients reach the right decision for them is an important part of our practice.
Clients often come to us not just because they know about wrongdoing but because they’ve been threatened, fired, or harmed due to their attempts to call attention to it. We help whistleblowers sort through the often confusing and bewildering situations they find themselves in. We have seen many such situations; we have both experience and empathy for what our clients are going through. As lawyers, we learn as much as possible about our clients’ circumstances, needs, and goals, and provide sound advice about what is possible going forward. The whistleblower world is complicated; having a trustworthy and reliable legal partner in the process is critical.
First, look for a lawyer who focuses on representing whistleblowers and not one who simply lists it among many areas of practice. This is a highly specialized area of law, which requires special expertise. There are simply too many complexities in the laws, government policies, and agency programs for anyone to pick it up as they go. Just as you would not want to be a medical patient undergoing a procedure that the doctor had never performed before, so it is here: hire a lawyer you can trust who has experience in whistleblower cases and a record of success.
In addition, beware of advertisements on search engines or message boards that appear to be law firms but are not. These are sometimes mere referral entities seeking a portion of the whistleblower’s award just for putting you in touch with a lawyer. In effect, they act as a “middle man” to your detriment. Before you sign an agreement, make sure you are hiring a licensed lawyer with whom you will actually have the attorney-client relationship — not just someone promising to connect you to one. Telltale signs include that (i) the website fails to list the names of any specific attorneys or law firms or (ii) has no physical address on the site, only a mailing address.
There is no substitute for experience. In choosing a whistleblower lawyer, look for how long they’ve been in business. What does their track record look like? How many cases have they handled? What do their past clients say about them?
No. We represent clients all across the country. We can also file cases anywhere they need to be filed. There are many reasons why you might choose to file a case in a different state or city than the one in which you live. For example, we frequently file cases in which prosecutors have experience, time, and interest in your particular type of fraud, which allows our attorneys to work with the government lawyers and enforcement officials who are best situated to diligently prosecute your case, rather than the ones that happen to work near you.
Yes, absolutely. We are professionally bound to protect the confidentiality of any information our clients or prospective clients give us and to make only the disclosures we are authorized by you to make.
Filing a Case
In general, you need to have evidence of wrongdoing that is not known to the general public. This evidence need not be in any particular form — it could be events you witnessed, conversations you were party to, documents you have in your possession, or other witnesses you’ve spoken with, but it needs to be specific enough that the government can evaluate whether it is correct and rely on it to launch a broader investigation. Law enforcement agents are swamped with leads, so information that is too vague or conclusory, even if true, is unlikely to warrant their scarce resources.
This is a complex question that deserves careful scrutiny. Most importantly: do not act without getting the advice of an attorney first.
Employers often argue that whistleblowers who take documents or other evidence have stolen corporate property or trade secrets. In general, the public interest in stopping fraud and other wrongdoing will usually trump an employer’s property interest in its documents and secrets. But there are important exceptions, so proceed with caution and only with the advice of a lawyer.
Similarly, the question of whether a whistleblower can tape conversations is a very subtle one, the answer to which will depend on the location of the callers and the reasons for the recording. Again, proceed with caution and get advice first.
While there is no precise formula, most successful cases will have certain key ingredients, including: (i) a clear or provable violation of a law or regulation (ii) resulting in damages to the government (or to shareholders or investors in the case of the SEC and CFTC whistleblower programs) that is supported by (iii) good evidence of a widespread pattern of misconduct (e.g., company-wide or nationwide) and (iv) a credible narrator in the person of the whistleblower.
The lawyer’s role is to assess all of these factors and determine whether there is enough to recommend proceeding, whether more evidence needs to be obtained, or whether the case is unlikely to succeed. Some cases are obviously compelling upon arrival to us; others require some digging and analysis as part of the evaluation process.
The answer will depend on several factors. Most whistleblower programs have a “statute of limitations” requiring allegations to be prosecuted within a certain period of time (usually around six years, but depending on the situation they can run from one to ten years).
There are also a number of features of many whistleblower programs that make it dangerous to wait too long to file. Most whistleblower programs require the whistleblower to offer nonpublic information and the longer a whistleblower waits, the better the odds are that the wrongdoing will be publicly discovered or disclosed. Most programs include a “race to the courthouse” feature under which the first whistleblower to tell the government about wrongdoing will receive the reward, even if other individuals later come forward with better information. In general, it is best to file as quickly as the theory and the evidence can be adequately evaluated and disclosed to the government.
What happens after you file depends in part on whether you have filed a False Claims Act complaint or a tip under an agency whistleblower program such as the SEC or the CFTC. In an FCA case, the government typically interviews the relator and often has a number of follow-up questions and document requests after the initial interview. In an agency whistleblower case, an interview is not automatic.
The longest phase of the whistleblower process then sets in as the government begins to investigate the reported fraud or misconduct. This can include a variety of law enforcement investigative tools, such as:
- interviews of other witnesses involved;
- requests for documentary evidence relating to the wrongdoing from the entities involved or third parties;
- conferences with any government agencies that have been victimized by the conduct; or,
- more aggressive tactics like search warrants or monitoring of phone calls.
This period of investigation often lasts years. At the end of this period, the government will decide whether it wants to bring a formal legal action against the company or individual accused of the fraud or misconduct.
A successful case can take many years. We have had successful cases that have taken anywhere from two to eight years. Cases that get declined by the government can sometimes reach the decision point more quickly than two years, but not necessarily. There are always complexities in whistleblower cases and patience is required.
Under the False Claims Act, a whistleblower is entitled to a “relator’s share,” which is 15%-25% of the government’s recovery in an “intervened” case or 25%-30% of the government’s recovery in a “non-intervened” case (i.e., that the whistleblower and their lawyers prosecuted on their own).
The agency whistleblower programs of the IRS, SEC, and CFTC have similar bounty provisions with slightly different ranges — the top end of the SEC bounty provision, for example, is 30% even though the whistleblower can play no litigation role as a party.
At the conclusion of a successful case, the government determines the size of the whistleblower’s award. This is generally based on the government’s assessment of how helpful or meaningful the whistleblower was to the case, among other factors. In this process, it is important to have a lawyer with credibility, experience, and skill in whistleblower cases to ensure that a client receives the credit they deserve. Likewise, should the government’s award fail to adequately reflect a whistleblower’s contribution, it is important to have lawyers prepared to pursue appropriate avenues for reviewing inadequate awards.
One other important point: in many cases, there may be multiple individuals who have contributed information to case, and the government must allocate the award among them. These “multiple whistleblower” situations can be extremely complex and difficult, and it is critical to have a good advocate who understands the legal nuances.
In agency cases, the whistleblower has very little role in the settlement process. The agency may or may not keep the whistleblower apprised of the status of the investigation or settlement negotiation. In fact, sometimes a whistleblower first learns that a matter has settled by when the agency publishes the “notice of covered action” inviting the whistleblower to file for the right to collect the award.
In FCA cases, in contrast, typically the whistleblower’s attorney will be involved in negotiating the scope and size of the settlement, the amount of whistleblower’s share, and fees to their attorneys. Because there are so many actors in the settlement process (including lawyers for all the government agencies involved in a case), settlement can be time-consuming and detail-oriented. It is vital as a whistleblower to have an advocate on your side who is experienced in the complexities of the settlement process.