Pasadena Qui Tam Lawyer

The government spends trillions of dollars each year. Billions of these dollars are spent on purchased goods and services from corporations, organizations and individuals. There is considerable concern that a substantial portion of these expenditures may be fraudulently obtained. Qui tam lawsuits are provisions created within certain federal and state laws to allow individual citizens to sue on the government’s behalf to recover fraudulently obtained funds. These provisions also provide incentives and protections for the individual bringing the suit. The person bringing the suit is often called a “whistleblower.” Often, qui tam suits are referred to as whistleblower suits.

See Whistleblower section for a list of laws that have qui tam provisions.

Qui Tam Statistics

  • $15 billion returned to the government since Congress amended the False Claims Act in 1986
  • $431 million paid to whistleblowers in 2012
  • The Centers for Medicare and Medicaid Services estimates that Medicare made at least $48 billion in improper payments in 2010
  • “The federal government lost $261 billion, or 7 percent of total spending, to fraud and waste in 2012,” said Rep. Darrell Issa (R-Calif.) during a February House committee hearing

Stopping Fraud and Abuse

The best-known law that allows private citizens to bring claims on behalf of the United States Government is The False Claims Act. This law allows a private citizen to sue an individual or a business that is defrauding the US Government and recover funds on the government’s behalf. The fraud can involve funds used to supply products and services directly to the government or money disbursed through a third party, such as a state or a government contractor, to further a federal government program or interest.

Congress understood that these fraud cases would have a much better chance of succeeding if insiders, employees of the companies with detailed information of the fraud, testified against their company. Congress also knew that any insider that acted against their company was likely to be fired or retaliated against. This would have a chilling effect on witnesses and limit the effectiveness of the Act. So Congress included rewards and anti-retaliation provisions for whistleblowers in the False Claims Act.

Qui tam lawsuits are structured to create the option for the government to join the case and essentially take it over, in which case the original qui tam plaintiff becomes what’s called a relator. This is good, because a qualifying qui tam plaintiff retains their incentives and now has the power of the government pursuing the case. If the government does not join, the qui tam plaintiff can continue to pursue the case on their own.

Qui Tam Actions

There are many activities an entity can engage in to defraud the US Government. Common activities include:

Falsified payment claims

Falsified payment support records

Promoting or selling products for improper use

Excess markup on outside vendor products or services

Deliberate production or delivery delay for contracted services

Double billing


Poor quality products

Unnecessary services or product features

Improper quality control practices

Non-conformance to contract specifications

Non-conformance to wage and employment laws

Financial bookkeeping out of compliance with GAAP

Final billing for unfinished contracts

If you have witnessed your organization engaging in one of these activities and wish to understand your rights and protections, call us for a free consultation at (626) 604-6973.

Rewards for Whistleblowers

The False Claims Act provides significant monetary incentives to persons who bring qui tam actions. If a qui tam plaintiff, or relator, is eligible (they have met the reward qualifications), they are entitled to rewards under the Act. Payment is made from the recovery in the qui tam action. Generally, the whistleblower may receive a reward of between 15-30% of the recovery. The exact amount depends on the circumstances of the case. If the government intervenes, the qui tam plaintiff generally receives between 15-25%. If the government does not intervene, the plaintiff generally gets between 25-30%. Lesser amounts, like 10% are paid to the plaintiff in cases where the government intervenes but the majority of the information relevant to the case is publicly available. Courts determine the percentage a relator receives based on their contribution and on the overall situation. The relator may also be awarded reasonable expenses and attorney’s fees.

Protections for The Whistleblower

Qui tam provisions also have retaliation protections. For example, under the False Claims Act, if a whistleblower is retaliated against, damages that may be recovered include: double his or her lost wages, back-pay, interest, special damages and reinstatement. These protections are broad reaching and apply to those working as contractors and agents of the entity engaging in retaliation, as well as those considered employees within the ordinary definition of the term. Keep in mind that many laws have qui tam provisions and protections. Protections will vary based on these laws. Seek the advice of an attorney to help you understand your rights, protections and options under the various laws with qui tam provisions.

Qui Tam Lawsuits 101

A qui tam lawsuit is initially a secret filing (filed “under seal”) to give the Justice Department time to investigate the allegations. The person or entity being accused of fraud is not told about the qui tam case. The government investigates the allegations and determines if it wants to intervene (join) the case. If the government decides not to join, the citizen can proceed with the suit on their own.

Damages under the False Claims Act may be as much as three times the government’s losses plus penalties for each false claim. Government supported cases have government resources and often result in very large settlements. However, individual cases also have merit and often result in substantial rewards.

A whistleblower’s reward depends on many factors, including the quality of the case as presented to the Justice Department and the work of the whistleblower’s attorney to help the qui tam case succeed. If the government intervenes in the case and recovers funds through a settlement or a trial, the whistleblower, or “relator,” is entitled to 15 percent to 25 percent of the recovery. If the government doesn’t intervene in the case and it is pursued by the whistleblower team, the whistleblower reward is between 25 and 30 percent of the recovery.

A qui tam suit can be brought under a wide array of federal and state laws (False Claims Act, Dodd Frank, etc.). These laws have “qui tam provisions.” These suits have become known as whistleblower suits because they provide whistleblowers – people reporting misconduct – with a powerful tool to both aid the government in combating fraud and reward the whistleblower.

Qui tam suits, under the False claims Act, have been used recently to help the government recover billions of dollars in Medicare and Medicaid fraud, defense contractor fraud and housing and mortgage fraud.