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What Are the Statistics for False Claims Act Damages Awards?

False Claims Act damages awards recovered by the federal government can add up to the billions of dollars.

False Claims Act Damages AwardsThe False Claims Act damages awards potentially recoverable by the federal government are huge. It’s commonplace for the Department of Justice to collect in the billions each fiscal year. But how much money does the federal government recover and how is this possible?

Recovery Under the False Claims Act

The False Claims Act allows the federal government to not just obtain a recovery on the actual amount of money stolen, but penalties, too. The penalties imposed by the federal government can be much higher than the actual amount of money taken through fraud.

The federal government can recover under the False Claims Act in two primary ways. The first is with treble damages. This just means triple the actual damages. If a hospital defrauds the federal for $1 million, treble damages allow the federal government to collect $3 million.

Next are penalties, which range from around $10,700 to $21,500 (recently adjusted for inflation) per fraudulent act. So if the hypothetical hospital stole the $1 million through 1,000 false billing statements, the federal government could collect anywhere from $10.7 million to $21.5 million in penalties.

This seems a bit unfair, allowing the federal government to collect more than twenty times the amount the fraudsters actually took. But this makes sense for several reasons.

First, it’s expensive to litigate a False Claims Act case.

It can take years of investigation and research before trial. Then even after the trial, if an appeal takes place, it can be another few years until the federal government can actually collect its money.

Second, the perpetrator of fraud must pay an amount of money well in excess of the money actually stolen.

If the perpetrator only had to pay back what it stole, then it has absolutely zero incentive to follow the law. It can ask, “What’s the worst that will happen? I just pay back what I took? If that happens, I have lost nothing.” Therefore, the damages and penalties the government imposes have to be high enough to deter someone who is on the fence about committing fraud.

Third, the False Claims Act has a special provision called the qui tam provision.

This allows whistleblowers to receive a piece of the government’s recovery. This bounty or reward ranges anywhere from between 10 percent to 30 percent and comes from whatever the government can recover from the violator. So just to break even, the federal government must recover the amount of money stolen plus 10 to 30 percent. The government often has to pay this 10 to 30 percent because a large number of False Claims Act cases are successful only with the help of the whistleblower.

How Much Money Does the Federal Government Recover?

The amount of money the Department of Justice recovers each fiscal year varies, but since 2000 the amounts range from just under $690 million to just over $6 billion. The following lists the amount of money that the Department of Justice recovered under the False Claims Act since 2000:

  • 2000: $1.6 billion
  • 2001: $1.8 billion
  • 2002: $1.2 billion
  • 2003: $2.2 billion
  • 2004: $686 million
  • 2005: $1.4 billion
  • 2006: $3.2 billion
  • 2007: $1.9 billion
  • 2008: $1.3 billion
  • 2009: $2.4 billion
  • 2010: $3.0 billion
  • 2011: $3.0 billion
  • 2012: $5.0 billion
  • 2013: $3.1 billion
  • 2014: $6.1 billion
  • 2015: $3.1 billion
  • 2016: $4.7 billion
  • 2017: $3.7 billion

Since 1986, the amount recovered by the Department of Justice is over $56 billion. To further understand these numbers, we can examine the 2017 fiscal year in more detail.

2017 Fiscal Year False Claims Act Recoveries by the Department of Justice

One of the biggest areas of recovery for the Department of Justice under the False Claims Act is the healthcare industry. In 2017, $2.4 billion of the $3.7 billion total recovered came from healthcare. And about $900 million of that came from the pharmaceutical and medical device industry alone.

One of the biggest recoveries came from Shire Pharmaceuticals LLC, which paid $350 million to settle claims that it gave kickbacks to doctors and clinics to overuse its products. One overused product, in particular, was its bioengineered skin substitute. The kickbacks took the form of travel, food, drink, medical equipment, medical supplies and cash.

Another industry making major payouts under the False Claims Act is the housing and mortgage industry. For the 2017 fiscal year, it paid $543 million to the Department of Justice.

It’s easy to see how significant the False Claims Act is for the federal government. And the amazing thing is that there are many instances of fraud the government will not be able to recover or doesn’t even know exist. This is why whistleblowers and the qui tam provision of the False Claims Act are so important.

Want to Help the Department of Justice Recover Money It Has Lost?

Connect with our legal team at Bothwell Law Group online now to learn more about False Claims Act damages awards.

What You Need to Know about the False Claims Act for Medicare

False Claims Act for Medicare is a significant source of fraudulent activity against the government.

False Claims Act for MedicareIndividuals looking to defraud the federal government often find themselves dealing with the False Claims Act for Medicare. But how is a major government social welfare program connected to a federal law aimed at stopping fraud? We’ll explain how and what it could mean for those on Medicare and taxpayers in general.

What Is Medicare?

Medicare is a medical insurance program run by the federal government. It provides health insurance benefits mostly to individuals over the age of 65. However, individuals younger than 65 can sometimes receive benefits. Medicare is important because unlike private health insurance, individuals receive guaranteed benefits at a very low cost. It is the government, through taxes, that foots the majority of the bill. It’s the government that pays for the bulk of medical services and products. Therefore, Medicare is a prime target for fraud, especially kickbacks.

What Are Kickbacks and How Do They Work with Medicare?

Kickbacks refer to a type of commission or payment that one party pays to another to obtain business or other benefits. Let’s use an example to explain how kickbacks work.

Let’s say you have a clinic that treats older patients, often those who receive Medicare benefits. This clinic treats the patients. Then they file a Medicare claim and receives payments from the federal government for the medical services provided. This is a pretty good arrangement for the clinic. However, it wants to make more money, so it devises a kickback scheme.

Under the clinic’s plan, it recruits Medicare-eligible individuals to serve as fake patients. These fake patients will go to the office and claim they need medical care, even if they really don’t. The clinic then bills the federal government through the Medicare program for non-existent treatment. Not knowing what’s really going on, the federal government sends the clinic Medicare payments. Those payments result in fraudulent gains for the clinic. In return, the fake patients receive a cut of the fraudulent Medicare payments. The cut (or commission) received by the fake patients is the kickback. Here, the clinic has “kicked back” some of its ill-gotten gains to the fake patients.

Another Example

A more common example of kickbacks doesn’t involve any fake patients. Instead of a clinic and a fake patient, let’s pretend we have a clinic and a doctor’s office. Medicare-eligible patients go to their doctor. The clinic and doctor have a special arrangement where the doctor will always send the unsuspecting patients to the clinic for medical care. That’s even if the patient doesn’t need it or the doctor could send the patient to a different clinic or hospital instead. In return for this “guaranteed business,” the clinic gives a cut of its profits from the referred patient back to the doctor. Basically, the clinic pays the doctor to give it patients so the clinic can then bill the federal government and receive reimbursement through Medicare. In this second example, the payment the doctor receives is the kickback.

How Does This Affect You?

For any taxpayer, Medicare fraud means wasted government money. From a big picture perspective, the vast majority of tax revenue collected by the federal government goes to two places. They are the military and social welfare programs, such as Social Security, Medicaid, and Medicare.

With so much taxpayer money paying for Medicare benefits, whenever Medicare fraud takes place, it means taxpayers paid for fraudulent medical services. Ultimately, this means the taxpayer paid taxes it didn’t really need to.

Two Problems Here

For those on Medicare, fraud is a problem for two reasons. First, it jeopardizes the future of Medicare because too much waste from fraud might mean a cut in Medicare benefits. More importantly, it also means Medicare patients may not receive the medical services they actually need.

In the second example from above, there’s a good chance that patients sent to the clinic are not receiving the proper medical care they need. Some patients might be better off going to a hospital. But instead, their doctor sends them to the clinic. In some cases, this could lead to physical harm to the patient. For example, the patient might need a specific procedure or test that can only take place at a hospital, but the doctor sends them to the clinic anyway. As a result, a disease goes undiagnosed. By the time the patient finds out what’s really going on it’s, too late. Or the patient doesn’t need any further testing or medical care but is still sent to the clinic anyway. This could subject the patient to a medical procedure that causes harm.

While these more extreme examples are less likely and most patients involved in a Medicare fraud scheme probably don’t get hurt, the possibility is there. And at the very least, there is a tremendous amount of wasted taxpayer dollars, which is never a good thing. Luckily we have laws such as the False Claims Act. It punishes fraudsters and provides rewards to individuals to investigate fraudulent activity. This helps the federal government recovery lost money due to fraud.

Want to Learn More About Medicare and the False Claims Act?

Contact our team of skilled False Claims Act for Medicare attorneys at Bothwell Law Group by calling 770.643.1606 today.

The Truth About Protection of Whistleblowers in Hospice Kickback Cases

The protection of whistleblowers is very important in False Claims Act legal actions.

protection of whistleblowersWhen fraud against the federal government occurs, the protection of whistleblowers becomes critical. This is because about 80% of False Claims Act fraud cases originate from a whistleblower. Why so many? Much of the fraud is well hidden and therefore unknown to the federal government. However, someone on the “inside” usually knows about it. In situations where the federal government is aware of fraud, it may not have the evidence to prove it. Again, those on the “inside” can usually find the evidence.

Whistleblowers are important to a federal government’s False Claims Act action against the violator. Therefore, it’s easy to see how the whistleblower could be the victim of retaliation, especially in cases involving kickbacks and hospice care providers. Luckily, there are special protections. Yet, they don’t always work as well as a whistleblower might hope.

Whistleblower Protections: Qui Tam Actions Begin in Secret

The False Claims Act contains various provisions that provide protections for a whistleblower. The first line of defense is the secrecy of a qui tam action when it begins.

A qui tam action is a lawsuit brought by the whistleblower (also called a relator) where the whistleblower sues the violator (often the whistleblower’s employer) on behalf of the federal government. Any of the stolen money the whistleblower can recover goes to the federal government, less a certain percentage as a reward to the whistleblower. This percentage ranges between 10 and 30 percent.

When a qui tam action begins, the whistleblower must file the complaint “under seal.” This means the whistleblower files the complaint in secret. Only the federal government and the court know about the lawsuit. One reason for this secrecy is to protect the identity of the whistleblower while the government investigates the basis of the qui tam action and assesses whether it will take over the case.

Secrecy Has Limits

This secrecy doesn’t last forever. It only lasts for 60 days, although an extension is possible if the government wants additional time to investigate the fraud. Even then, once the case proceeds to trial, things change. It’s very likely the defendant in the qui tam action will be able to figure out who the whistleblower is because the whistleblower will likely be a key federal government witness in the case.

But in many cases, the defendant discovers the whistleblower’s identity before the qui tam action ever gets to trial. Once the federal government begins investigating the alleged fraud, the defendant will know something is up. They’ll realize the investigation probably began with the help of an inside person. Perhaps the whistleblower previously warned the defendant about the fraud. Or maybe they’re the only person with access to information that the federal government now knows. The defendant can often put two and two together. When this occurs, the whistleblower can assume he or she will endure some form of retaliation. Luckily, the False Claims Act has anti-retaliation provisions that make this retaliation illegal.

Whistleblower Protections: Anti-Retaliation Provisions

The False Claims Acts makes it unlawful for an employer to retaliate against a whistleblower. This retaliation can take the form of discrimination, harassment, threats, demotion, firing and pay cuts.

If a whistleblower can prove retaliation, they can get their job back plus double back pay, special damages, interest and attorney’s fees. On paper this is great. But the reality doesn’t work as well, and there are several reasons for this.

First, it’s not always easy to prove retaliation.

An employer might fire the whistleblower. If the whistleblower has a history of poor performance, the employer can make the plausible argument that the firing has nothing to do with retaliation. This may not be true. But it creates enough doubt as to the reason of the whistleblower’s firing to prevent a court from concluding the employer is guilty of unlawful retaliation.

Second, let’s say the whistleblower can prove illegal retaliation.

The potential relief often isn’t worth the consequences. For example, is a whistleblower who suffers retaliation really going to want to still work at the same employer that just tried to fire him or her? What if the whistleblower wants to continue working for the employer. Can the whistleblower expect fair treatment, as if nothing happened? The answer to both these questions is usually “no.”

But working somewhere else is not always possible because now the whistleblower has a reputation for being “untrustworthy.” Even though the whistleblower did the right thing, they may face challenges. Few companies want to hire someone they know has a reputation for going behind the employer’s back and reporting something to the federal government.

The harsh reality is that the False Claims Act’s anti-retaliation provision helps. It can reduce the pain or harm a whistleblower endures. But it rarely provides for the perfect protection of whistleblowers, especially in the hospice care industry.

Thinking about Becoming a Whistleblower?

Contact the Bothwell Law Group by calling 770.643.1606 today. Let our firm’s skilled attorneys explain the protection of whistleblowers so you can make a wise choice.

What Kind of False Claims Act Damages Are the Most Common?

Violators may be subject to several types of potential False Claims Act damages.

False Claims Act DamagesThose who defraud the government could face several types of False Claims Act damages. Those who violate the False Claims Act must pay these damages. They are rarely subject to a judge eliminating them. These damages aim to not only make the federal government whole, but severely punish illegal behavior. The following is a description of these damages, as well as how they work.

False Claims Act and Damages

The False Claims Act imposes monetary penalties on individuals who defraud the government. Instances of fraudulent behavior usually revolve around either: overcharging the government, mis-charging the government or avoiding having to pay the government.

Overcharging occurs when the violator makes the government pay a higher price than the government should pay. This is one of the most common ways fraud occurs against the government.

Mischarging is the charging for a service or item that they did not actually provide to the government. Mischarging is common in fraud cases involving healthcare services.

Avoiding having to pay the government is like the reverse of overcharging or mis-charging in that the violator tries to get out of a bill they should pay.

Identifying these methods of defrauding the government will help determine what potential damages a violator must pay.

Two Major Types of False Claims Act Damages

The False Claims Act imposes two major types of damages or penalties on a violator. The first are penalties that range from between $5,000 and $10,000, although this amount goes up for inflation and is now closer to $5,500 and $11,000. This penalty will apply to each instance of misconduct. This means if a violator engages in 100 instances of fraud against the government, they don’t face an $11,000 penalty. Instead, they face a far larger penalty of $1.1 million.

The second type of damages under the False Claims Act is treble damages. Treble is a fancy legal word for triple. In other words, treble damages are another way of saying “triple the actual damages.” Treble damages are pretty severe. Many laws only allow for actual damages plus interest or sometimes double damages. Treble damages are usually a sign that Congress or other government entity wants to severely punish a particular behavior. Let’s look at a simple example to explain how this could work.

An Example of Defense Contractor Fraud

A military contractor overcharges the government $50 for each piece of body armor it manufactures and delivers to military units and federal law enforcement officers. If the government orders 10,000 pieces of body armor, the military contractor overcharged by $500,000. So if the government catches the military contractor, that contractor will have to pay $1.5 million as treble damages, even though the actual damages are only $500,000.

Forcing violators to pay treble damages is very important because it serves as a strong deterrent to potential violators. If the False Claims Act only made the violator pay actual damages, there would be almost no deterrent effect. This is because someone who is thinking about defrauding the government might think the potential penalties are worth the risk. They might think this if they only have to pay up to $11,000 for each fraudulent transaction plus actual damages. We can use another example to show how this is the case.

Military Contractors and False Claims Act Damages

Let’s take another military contractor, but instead of manufacturing and delivering thousands of pieces of body armor, they are only making one nuclear powered aircraft carrier at a cost of $10 billion. In an attempt to defraud the government, the military contractor actually charges the government $10.1 billion. This results in a $100 million overcharge.  The government pays $10.1 billion and doesn’t give it a second thought.

Let’s assume the government eventually discovers the military contractor’s overcharge and successfully prosecutes them under the False Claims Act several years later. Without treble damages, the military contractor would only have to repay the $100 million it overcharged plus $11,000 in penalties.

So in reality, for the opportunity to steal $100 million from the government, the military contractor only lost $11,000. That’s an amazing deal – consider that a $100 million loan over a term of several years would be impossible to find for only $11,000 in interest. The total interest for a $100 million loan over several years would probably be closer to $10 million or more. But with treble damages, the military contractor isn’t $11,000 poorer, but rather, $300,011,000 poorer. This is a huge difference in monetary consequences that should deter most potential fraudsters.

Need More Information About Damages Under the False Claims Act?

Contact our team of skilled False Claims Act damages attorneys at Bothwell Law Group by calling 770.643.1606 today.

How Do I Find a Good False Claims Act Lawyer?

False Claims Act Lawyer

False Claims Act LawyerFederal False Claims Act claims are among the most complex legal claims. They stretch across multiple substantive areas of the law. They also have more procedural steps to take than a standard legal claim. All attorneys are technically qualified to work in every area of the law. However, the False Claims Act lawyer you choose can make or break your claim. There are a few things you may want to consider looking for in a False Claims Act lawyer.

Experience in a Specific Field

The False Claims Act covers many different types of fraud. This includes Medicare and Medicaid, disaster relief funds, defense contracting, and more. An attorney will need to be able to show that specific laws relevant to the industry were violated. Therefore, they will need to be familiar enough with the industry to know what evidence to look for and how to get it. An attorney with extensive experience in financial services industry may not know how to analyze medical billing records and build a strong Medicare fraud case.

Experience Working With the Government

All qui tam litigation under the False Claims Act must be reviewed by the Department of Justice. In many cases, the DOJ will take over the litigation. As a matter of legal procedure, all information that a whistleblower has must be turned over to the Government. However, it helps to ensure that the Government can pursue the case successfully. Hence, it can be helpful to have an attorney who knows how to present the potentially thousands of pages of documents in a way that highlights the most important information and makes the job of an overworked Government attorney easier.

Ability to Back Litigation

Lawsuits can easily have tens or hundreds of thousands of dollars in filing fees. There are also costs of obtaining and reproducing costs, travel expenses for witnesses, and deposition fees. Often, a large firm may be able to cover these fees pending a court order that the defendant reimburse them. However, a small firm may not have the financial resources to proceed. Additionally, a small firm attorney may not be able to provide enough attention to the case if they need to continue to take other cases to pay their daily bills.

A Track Record of Success

Past results are never a guaranteed of future success. However, they are one possible indicator that an attorney has the knowledge and experience to handle a similar claim. An attorney with a lengthy track record has already likely made and learned from the mistakes that a less experienced attorney might make that could damage or delay a case.

To speak with an experienced False Claims Act lawyer, contact the Bothwell Law Group today.

Differences between Fraud and Mistake Under the US False Claims Act

US False Claims Act

US False Claims ActBefore filing a lawsuit under the US False Claims Act, some whistle blowers may be concerned about the legitimacy of their case. Maybe you feel unsure about the evidence you have gathered. Or, maybe you feel confused about the exact definition of fraudulent activity. At Bothwell Law Group, we hope to help you better understand the details concerning the US False Claims Act. It is a very detailed and complicated law. Before moving forward, we will clearly distinguish between fraud and a mistake.

What Is a Mistake?

In some cases, business owners may not be unethical or malicious. They may simply be terrible business owners. It is true that in some cases mistakes may result in the government losing money. However, we should be clear: a mistake is not the same as fraud.

How Is a Mistake Different from Fraud?

To put it simply, fraud requires knowledge of the consequences of your actions. Under Section 3729b of the US False Claims Act, the law is very clear. In order for fraud to occur the person must have knowledge of the laws regarding their actions, whether or not they are intentionally defrauding the government. Even if the purpose of their actions is not fraud, if they are aware of the laws regarding their choices, their actions will still be considered fraud.

If you are thinking the difference between a mistake and fraud under the false claims act seems to be a very fine line, you are right. For employees, who typically do not have professional experience with whistle blowing, it can be hard to distinguish between the two.

What Should You Do If You Suspect Fraud?

Because of this, we instruct any employee working in healthcare who suspects their employer may be committing fraud to gather any available evidence concerning their employer’s behavior. Next, we recommend employees who suspect fraud to play it safe by speaking with an attorney who has extensive experience working with Medicare fraud related lawsuits and who has thorough knowledge of the US False Claims Act.

An experienced false claims attorney can take a careful look at the evidence you have gathered. Then, they can make a suggestion about whether or not you should move forward with your claim. At Bothwell Law, our attorneys understand what it takes to have a successful Medicare Fraud lawsuit. We would never recommend moving forward if we did not believe you had adequate evidence of fraud.

Why You Should Get an Attorney

Working with an experienced attorney with experience in fraud can provide you with peace of mind and confidence, so if you are ready to move forward you can do so without worry. If we have determined you have substantial evidence of fraud, we will guide you through each step of the process.

Have questions about the US False Claims Act? Click to contact the Bothwell Law Group online.

10 Ways to Know You Have Hired the Best Civil Litigation Attorney

Civil Litigation Attorney

Civil Litigation AttorneyHiring a civil litigation attorney is relative to the situation at hand. In doing so, you want to hire the attorney that will best meet your needs. However, there are some considerations in the hiring of a civil litigation attorney that can make the experience of civil litigation not only bearable, but can turn the matter into a success.

Here is how to know you have the best civil litigation attorney:

1. You want an attorney that you get along with.

Civil litigation is so difficult regardless of which side you are on. You want to make sure that your attorney explains the process to you and protects you from the worst of the process.

2. Your attorney is upfront concerning his or her opinion on the outcome of the matter.

Your civil ligation attorney has an opinion based on his or her expertise. It is important to understand what that opinion is and the likelihood of prevailing. This will drive the entire litigation and the likelihood of settlement.

3. Your attorney has a clearly written and understandable fee agreement.

This agreement is the basis of your relationship with your attorney. Most problems between and attorney and client arise out of the lack of a clear understanding of the fees payable to your attorney. Make sure that you fully understand the fee agreement and what it entails.

4. Your attorney communicates with you regularly and clearly.

Communication is so important. Things can change quickly as civil litigation unfolds. It is important that your civil litigation attorney can communicate with you concerning the changes in trajectory as they arise.

5. Your attorney doesn’t promise you a specific outcome.

We all want to win. But there are so many variables in civil litigation. We cannot know the outcome before engaging in the process.

6. Your attorney follows through.

This is the idea of credibility. If your civil litigation attorney tells you, or the judge, or opposing counsel that he or she will do something, your attorney flows through and does what they have said they would. Credibility leads to trustworthiness. You must be able to trust your attorney.

7. Your attorney is civil with others.

Civil litigation is similar to combat, but it needn’t be combative. It is important for your attorney to be persuasive, not confrontational.

8. Your attorney is persuasive.

The power of persuasive writing and speaking is so important in civil litigation. Attorneys work to perfect this skill. You want your civil litigation attorney to persuade others that yours is the correct position.

9. Your attorney is organized.

Organization is a skill related to being able to conduct oneself professionally. It leads to a more cohesive presentation of the case and that can be persuasive to the trier of fact.

10. Your attorney is a skilled negotiator.

Most cases are settled out of court during negotiations. Being a skilled negotiator involves not only being skilled in the law, it also requires a great deal of people skill. A good civil litigation attorney is an expert at handling people.

The above list is just 10 Ways to Know You Have Hired the Best Civil Litigation Attorney. This is not an exhaustive list, but most of the items listed above are crucial in litigation. Interview your attorney before you hire them.

How Knowing the False Claims Act History Can Help Your Case

False Claims Act History

False Claims Act HistoryThe False Claims Act History is a long one. Qui tam laws date back to the Middle Ages in England. Nearly 700 years ago, King Edward II came up with a one third reward to individuals (relators) if the relator successfully sued government officials who were moonlighting as wine merchants.

Two hundred years later, Henry VII followed suit. The Maintenance and Embracery Act 1540 allowed individuals (common informers) to sue for certain interference with justice in land title related legal proceedings. Ireland still has this act in force today.

So, how does this relate to America?

During the American Civil War (1861 – 1865), all kinds of fraud was going on such as:

  • Contractors selling decrepit mules and horses in ill health to the Union Army
  • Some contractors selling rancid provisions and rations to the Union Army
  • Contractors selling faulty rifles and ammunition to the Union Army

Because of this and other acts, Congress passed the False Claims Act on March 2, 1863.  At times, the False Claims Act is called the “Lincoln Law”.  This is because President Abraham Lincoln was in office at the time.

Under the False Claims Act, the qui tam provision offered a reward permitting citizens to sue on behalf of the government. As such, said “whistleblowers” can receive a percentage of the recovery.  U.S. Senator Jacob M. Howard sponsored this legislation.  He knew some of the whistle blowers were a part of the unethical activities themselves. However, he said “I have based the [qui tam provision] upon the old-fashioned idea of holding out a temptation, and ‘setting a rogue to catch a rogue,’ which is the safest and most expeditious way I have ever discovered of bringing rogues to justice.”

Over the Years

The False Claims Act has primarily been used against defense contractors. However, health care fraud began to receive more focus in the 1990s. By 2008, health care fraud accounted for 40% of recoveries.

In 2009, the Fraud Enforcement and Recovery Act of 2009 (FERA) passed into law. Among other things, this Act increased the protection of qui tam relators.

There were multiple major changes to the FCA because of this Act.

President Barak Obama’s signature put the Patient Protection and Affordable Care Act into place in 2010.

By 2014, thirty states and the Disctrict of Columbia now have False Claims statutes. These are in place to protect publicly funded programs from fraud.

Knowing the False Claims Act History can help your case. For hundreds of years, individuals have been able to file claims on behalf of the government. The laws are for people like you who know of others committing fraud against the government or against individual states.

If you do know of fraud, contact a whistleblower attorney as soon as possible.

What is the Penalty for Violating Federal False Claim Acts?

penalty for violating federal false claim acts

penalty for violating federal false claim actsThe federal False Claim Acts make it a crime to file a false claim for payment from the federal government. One common example is Medicare fraud. This involves billing for treatments or medications that were never provided. The Acts cover claims that are made despite knowing that the claim is false. It also covers claims by someone who is recklessly disregarding information that would lead them to know that the claim is false. To encourage the reporting of false claims, the Acts also provide whistleblowers with compensation and protection from retaliation.

Penalty for Violating Federal False Claim Acts

The federal False Claim Acts provide for both civil and criminal penalties against violators. The criminal penalty for violating federal False Claim Acts can include fines of up to $50,000 and/or imprisonment. Civil penalties of up to three times the amount falsely claimed plus an additional penalty of up to $11,000 per false claim are also possible.

Whistleblower Compensation for Reporting False Claims

If the government learned of the fraudulent activity from a whistleblower, the whistleblower may be entitled to compensation under qui tam laws. The amount of compensation depends on whether the  government recovers the funds, or the whistleblower’s own lawsuit recovers the funds. They range from 15 to 30 percent of the total amount recovered by the government.

To begin a qui tam action, the whistleblower must file a sealed complaint in the appropriate court and serve the complaint on the U.S. Attorney for that district. The government then has 60 days to determine whether it will prosecute the case. If the government declines to prosecute the case, the whistleblower may prosecute it privately.

Whistleblower Protections Under Federal False Claim Acts

Whistleblowers are protected from retaliation for any actions taken under the federal False Claim Acts. This includes both making reports to the government and filing a private lawsuit under the Acts. Employers cannot terminate, harass, or reassign whistleblowers to less desirable positions or schedules. Furthermore, they cannot take any adverse action against an employer because they took action as permitted under the Acts. If you can prove retaliation occurred, the court can force the employer to reinstate the employee. Further, the employer will have to provide them with double their back pay plus interest. Finally, the employer must reimburse their legal costs and any other expenses incurred as a result of the retaliation.

Successfully prosecuting a qui tam action or whistleblower claim requires extensive knowledge of legal procedures and the specific laws governing the false claim. Procedural errors or insufficient evidence can lead to dismissal of the action. This can happen even though they may have been able to succeed on their merits. To speak with an experienced qui tam and whistleblower attorney about how to proceed, call Bothwell Law Group today.

What Types of Acts Are Covered by the False Claims Act?

Types of Acts Are Covered by the False Claims Act

Types of Acts Are Covered by the False Claims ActKnowing which types of acts are covered by the False Claims Act is important. It can determine whether a whistleblower can take advantage of reward and protection provisions under the False Claims Act. While most acts that fall under the False Claims Act revolve around the fraudulent taking of money from the US government, not every instance of fraud will result in a False Claims Act violation.

What Does the False Claims Act Prohibit?

In general, the False Claims Act will outlaw an activity that results in an individual or organization improperly obtaining money or property from the US government. An individual or organization may do this by submitting false documents to the government, obtaining government property from someone who is not allowed to sell or distribute the property or by simply planning with another person or entity to defraud the government.

To help the US government fight fraud, the False Claims Act contains a qui tam provision which allows non-government individuals, called relators, to bring claims on the government’s behalf. The purpose of bringing these claims is to impose penalties on the wrongdoer and recover money lost as a result of the fraud.

Because individuals who act as whistleblowers are at extreme risk of suffering from retaliation, the False Claims Act contains an anti-retaliation provision. This provision prohibits an employer from discharging, demoting, harassing, threatening or in any way discriminating against an employee, contractor or agent who exercises his or her rights under the False Claims Act, including acting as a whistleblower. If the employee, contractor or agent can prove retaliation, they may receive reinstatement (if applicable), double the back pay, interest, special damages and reasonable attorneys’ fees.

What Types of Acts Are Not Covered by the False Claims Act?

There are three main exceptions to the qui tam provision of the False Claims Act. Qui tam actions cannot come from a current or former member of the armed forces against another member of the armed forces when the alleged fraud occurred during the individual’s service in the armed forces.

Another exception exists when a qui tam action is against a member of Congress, the judiciary or a senior executive branch official. In these situations, the qui tam action cannot proceed if the evidence used in the qui tam lawsuit uses information known to the US government when the qui tam action began.

The final primary exception is tax fraud. Instances of tax fraud or any other improper activities that would fall under the Internal Revenue Code of 1986 are not subject to the False Claims Act.

There are also several defenses to certain parts of the False Claims Act that might normally result in liability. The first defense is the lack of knowledge defense. If an alleged wrongdoer didn’t know nor had no reason to know it was committing fraud against the government, they cannot be liable under the False Claims Act.

Another defense is that the US government already knew about the alleged fraud but chose not to take action on it. For example, a contractor knowingly does not conduct testing using methods as required by its contract with the US government. If the government is aware that different testing methods are in place but approves the different testing methods anyway, there can be no False Claims Act violation for knowingly failing to abide by the contract.

What Specific Examples of Acts Are Covered by the False Claims Act?

The False Claims Act covers a broad array of prohibited activities, including:

● Engaging in improper conduct to hold onto an overpayment by the US government.
● Asking the government to pay something the individual or wrongdoer knows it is not entitled to have.
● Providing defective products or services to the government. The False Claims Act will apply even if the seller doesn’t knowingly provide defective products or services, as long as the seller should have known the product or service was defective.
● Planning with others to violate the False Claims Act.
● Purchasing US government property from a government officer or employee that is not allowed to sell the property.
● An employer punishing an employee, agent or contractor for reporting possible False Claims Act violations. Anything significantly detrimental the employer does to the employee, agent or contractor for exercising rights under the False Claims Act will qualify as retaliation. This includes firing, demotions, pay cuts and harassment.

Need More Information?

If you’ve still got questions about what specific types of acts are covered by the False Claims Act, don’t hesitate to contact the Bothwell Law Group.

What Are the Activities Covered by the False Claims Act?

Activities Covered By The False Claims Act

Activities Covered By The False Claims ActActivities covered by the False Claims Act include a variety of actions where an individual or organization can take money for themselves that otherwise belongs to the US government. We will provide an overview of the types of activities that typically fall under the False Claims Act.

Activities Specifically Covered by the False Claims Act

The False Claims Act sets out seven specific prohibited activities. Any violation of these activities can result in liability of the wrongdoer. The prohibited activities, as well as examples of each, are below:

● “Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” An example would be a construction contractor submitting an invoice for repairs made to a government building, all while knowing the invoice is incorrect because it lists work that was never actually done.

● “Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” Consider a health care company reimbursed by the US government for each medical test it provides to soldiers during basic training. To show reimbursement costs, the health care company submits a document showing that each test cost $50 when it really only cost $10.

● “Has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property.” This could occur if a shipping company should deliver 100,000 doses of morphine to troops overseas, but only delivers 95,000 doses and keeps 5,000 doses for itself, perhaps to sell on the international black market.

● “Is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true.” This could occur when a defense contractor receives a shipment of raw materials for building a ship. The contractor certifies the receipt showing the delivery of the raw materials is correct without first confirming that it contains all the raw materials detailed in the invoice.

● “Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property.” An example might include a hunting store buying military surplus gear and equipment from an enlisted soldier, but the hunting store knows the soldier stole the items from a military warehouse.

● “Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” An example involves a hospital that receives payments from the US government for treating a certain number of patients throughout the year. But at the end of the year, the hospital submits false documents claiming the cost to treat those patients was more than expected (when it was really less than expected) to avoid submitting a refund check to the government for overpayments received.

● “Conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G).” This means creating an agreement or plan with another to commit one of the above-listed activities prohibited by the False Claims Act.

Penalties for Engaging in Activities Covered by the False Claims Act

The penalties for violating the False Claims Act depend on the number of false claims submitted to the US government. The penalty for each violation ranges between $5,500 and $11,000. This amount changes periodically with inflation. Additionally, the individual or organization that violated the False Claims Act can be liable for up to three times the actual damages suffered by the US government.

The calculation of penalties means many small violations of the False Claims Act can sometimes result in a bigger penalty that a few large violations. This is one reason why activities covered by the False Claims Act violations in the healthcare setting often result in some of the larger penalties imposed on violators.

Wondering What Constitutes a Violation of the False Claims Act?

To learn more about activities covered by the False Claims Act, you should contact the Bothwell Law Group online and set up a time to discuss any questions you may have about the False Claims Act. We are here to help you get the information you need.

Why Are Awards Offered Under the False Claims Act?

Awards Offered Under the False Claims Act

Awards Offered Under the False Claims ActIndividuals who decide to blow the whistle on fraud taking place against the US government are eligible for awards offered under the False Claims Act. The vast majority of claims brought under the False Claims Act are the result of an individual bringing the fraud to the attention of the government. One of the reasons so many individuals are willing to expose improper and illegal activity is for the chance of getting a significant financial reward.

Reward Provisions of the False Claims Act

The False Claims Act contains a qui tam provision, which allows individuals, called relators, to bring a civil lawsuit against an organization or another person who is allegedly defrauding the US government. A relator is eligible to receive between 15% and 30% of the total amount of money recovered by the government.

If the relator can convince the government to join its lawsuit against the alleged wrongdoer, the relator can get between 15% and 25% of the total amount recovered. When the government decides to join the lawsuit, it means there’s a better chance the relator will receive the qui tam reward. This is because the US government has vast resources to pursue the whistleblowing claims. Additionally, the government won’t join cases unless it thinks it can win.

When the US government decides not to join the relator’s lawsuit, it usually means a lot more work for the relator. To compensate the relator for the increased difficulty in recovering money from the wrongdoer, they are eligible for between 25% and 30% of the money ultimately recovered.

In some limited instances, the relator may only get 10% of the recovery. There is no exact percentage for recovery because each case is different and the amount of involvement a relator will have will differ for each qui tam lawsuit. The courts are therefore allowed to have some leeway in deciding exactly how much a relator should receive.

The Reason for the Reward Provision of the False Claims Act

So why does the False Claims Act have a qui tam provision that allows relators to personally profit from bringing a qui tam action against an organization which is allegedly defrauding the US government? There are awards offered under the False Claims Act so individuals will be more likely to come forward with information concerning fraudulent activity.

The question is then, why does the government want individuals to come forward and help root out fraud? Why can’t the government just do it themselves? That’s because the government doesn’t know about a lot of the fraud that is occurring. After all, if it did, the government would probably put a stop to it themselves by prosecuting the wrongdoer and recovering the illegally obtained money. Because the US government isn’t aware of the fraud that takes place, it must rely on other individuals to identify the fraud for them. The saying, “you don’t know what you don’t know” is particularly applicable here.

It takes a lot of time, effort and sacrifice to serve as a relator, which is another reason why the False Claims Act provides a reward. When an individual decides to be a whistleblower and relator, they are exposing themselves to revenge and retaliation. While the False Claims Act has an anti-retaliation provision, it doesn’t completely protect whistleblowers from more subtle and hard-to-prove retaliation. Most importantly, it can’t protect a whistleblower from having a reputation as a “snitch.”

This can be especially damaging, effectively blackballing an individual from an entire area of work and making them almost unemployable in their industry. Lastly, while the relator can keep his or her identity a secret to some extent, the relator’s identity will eventually come to light if they hope to recover their qui tam reward. One way or another, the defendant in a qui tam action will find out who blew the whistle on them.

But that’s not all. To recover the reward, the relator has to provide a lot of information to the US government. A simple phone call saying “Acme Corporation ripped off the Department of Defense by selling those widgets at an inflated price” isn’t going to cut it. The relator must provide detailed information, such as invoices, first and last names, receipts, e-mails and other documents that will effectively serve as a smoking gun in the lawsuit. Then the relator will need to cooperate throughout the trial, potentially serving as a witness and helping the government continue their investigation into the fraud.

Interested in Getting Awards Offered under the False Claims Act?

If you think you might have information about possible fraud against the government but aren’t sure if it’s worth reporting, the awards offered under the False Claims Act might make it worth your while. However, it’s best to speak with a skilled False Claims Act attorney at the Bothwell Law Group by calling 770-643-1606 to determine what your best course of action might be.