Under the federal False Claims Act, there are two primary ways that the Department of Justice (DOJ) can initiate a civil claim for reimbursement and other penalties. The first is through a government-initiated investigation. The Federal Bureau of Investigation (FBI), the Department of Health and Human Services (DHHS) and numerous other agencies investigate individuals and businesses for submitting false and fraudulent claims to the government; and, based upon the evidence uncovered during these investigations, the DOJ can either file a civil lawsuit under the False Claims Act or press criminal charges.
The second way that individuals and businesses can face liability under the False Claims Act is through a citizen-initiated action pursuant the law’s whistleblower provisions. This is known as a “qui tam” lawsuit, and it has both important similarities and differences to government-initiated enforcement litigation.
Overview of the Qui Tam Litigation Process
The following is an overview of the primary steps involved in a qui tam case under the federal False Claims Act:
- A Whistleblower Files a Complaint – A qui tam action starts with the filing of a whistleblower complaint. While whistleblowers are frequently current or former employees, any member of the public who has information about a violation of the False Claims Act can initiate a civil action. The whistleblower (referred to as a “relator”) is generally entitled to remain anonymous during the government’s ensuing investigation.
- The Government Assesses the Whistleblower’s Claim – Once a relator files a qui tam complaint, the government will assess the allegations in order to determine whether an investigation is warranted. This investigation may involve prosecutors from the DOJ, agents from the FBI and investigators from any other agencies affected by the alleged fraud (such as DHHS in Medicare fraud investigations).
- The Government Decides Whether to Intervene – Based upon the results of the investigation, the government will either intervene in the litigation or decline to take further action. As a result, it is critical to have legal representation during the investigation. Note, however, that the relator can continue to pursue the case independently even if the government concludes that further action is unwarranted.
- Settlement Negotiations and Trial – Like non-government civil litigation, False Claims Act cases can (and often do) settle. Settling is typically the quickest, least-costly and least-disruptive way to resolve a qui tam However, if settlement is not a viable option, you may need to take your case to trial—in which case the litigation will proceed similar to other types of federal claims.
The civil penalties in qui tam cases under the False Claims Act can be severe. The maximum penalties under the law include payment of three times the government’s losses (“treble” damages) plus fines of up to $11,000 per false claim. What constitutes an individual “false claim” is construed narrowly, and defendants in qui tam actions can often face hundreds of thousands – if not millions – of dollars in civil liability.
Schedule a Confidential Consultation at Cheshire Parker Schneider & Bryan, PLLC
If you or your company has been named in a qui tam lawsuit, it is critical that you hire an attorney to intervene in the government’s investigation as soon as possible. To schedule an initial consultation with the Raleigh federal criminal defense attorneys at Cheshire Parker Schneider & Bryan, PLLC, call (919) 833-3114 or contact us online today.