Criminal False Claims Act Archives - National Whistleblower & Government Fraud Settlement Attorney

The Reality of False Claims Act Criminal Penalties

Posted on November 9, 2016November 2, 2016 by Mike Bothwell

Are you wondering about False Claims Act criminal penalties? In life we know actions have consequences. If you work out for the first time, your muscles feel the strain. If you celebrate too much, a headache is in store the next day. What about companies who defraud the government by charging crazy prices for basic items? Or hospitals that bill Medicare for procedures never performed?

False Claims Act criminal penalties include huge fines and even prison terms. Usually, a whistleblower is an employee of the offending company. Even if the whistleblower is not an employee, they can pursue a complaint. This suit is a civil action, and civil penalties will apply. If the government decides to pursue a claim, it’s considered a criminal offense. In reality, civil penalties are usually fines, but criminal penalties can lead to prison.

The process of making a claim under the False Claims Act is quite involved. The whistleblower’s attorney files a complaint with the United States District or Federal Court. The Department of Justice then has 60 days to investigate the claim. The government decides if they are going to prosecute or decline. If they decline, the person who filed the complaint still has the option of going ahead with a civil suit.

False Claims Act Criminal Penalties Through the Years

As with other criminal charges, claiming ignorance is not a defense. The company cannot admit the offense but not claim responsibility for it. “I’m sorry, I got it wrong and I promise not to do it again,” is not acceptable to the United States District Court. Here are examples of False Claims Act criminal penalties that some major companies have had to face:

● The court levied the largest fine ever on the drug manufacturer GlaxoSmithKline. They paid $3 billion in both civil and criminal suits. The cost of penalties can rise in a hurry because each complaint counts as a separate claim. The whistleblowers collected a percentage of this money.
● In Cleveland, a nursing home company paid $145 million in fines for making false claims against the government. The hearing proved the company was claiming that qualified staff provided services to clients. The fact was the staff members providing services were not qualified.
● Trinity Industries paid $663 million when the court found they changed the way they made guardrails. The company contracted with the government, but they did not report the changes they made. This failure to report violated the standard of their government contract and was considered fraud.

Are Criminal Penalties Always Given for Violations of the False Claims Act?

If the government investigates and finds there were no instances of fraud, they drop the criminal complaint. The government has the decision-making power. They can choose to settle the claim or drop the charge, even over the objections of the person who brought the claim to their attention.

The government also has the option of pursuing some claims but not others. If the government investigates a complaint and finds a company defrauded them six times, they can continue all six counts. The court can fine the company for those six counts. But, if the whistleblower stated in his complaint that the company defrauded them eight times, and the government only finds six, the other two charges will not result in criminal penalties.

In addition to massive fines, False Claims Act criminal penalties can also include prison terms. Between the cost of the fines and time served in jail, the ultimate consequences can be intense.

Are There Ever False Claims Act Criminal Penalties for the Whistleblower?

You can see the False Claims Act criminal penalties are enormous. But are there ever any penalties for the whistleblower if they worked for the guilty company? The short answer is usually not. The whistleblower, or relator, finds himself in a tight spot. Often as a condition of his job he has participated in the fraudulent acts. He wants to do the right thing and report the criminal activity. But he doesn’t want to incriminate himself along with his employer.

The good news for whistleblowers is that the government is almost always more interested in prosecuting the bigger fish in the pond. They want to bring the originators and planners of the crime to justice. But prosecutors prefer to interview a whistleblower before they offer them immunity. The problem lies in that the whistleblower may incriminate himself while talking. The responsible thing for the relator, or whistleblower, to do is hire an attorney experienced in filing False Claims Act violations.

Find out more about False Claims Act criminal penalties by contacting the Bothwell Law Group

How Common Is False Claims Act Retaliation and Should I Be Concerned?

Posted on May 9, 2016May 11, 2016 by Mike Bothwell

Are you looking for information about False Claims Act retaliation? The Federal Claims Act (FCA) allows anyone to bring what is called a “qui tam” action in federal court against wrongdoers, on behalf of the U.S. government. The only requirement in order to bring this action is that the person bringing the suit must have knowledge of action taken by an individual or organization to fraudulently or falsely collect payment from the U.S. government.

The so-called “whistleblower” provisions of the FCA provide financial incentives for people to come forward with evidence of wrongdoing because often the people closest to the fraud can detect it earlier, and with more success than the government could do.

As discussed in previous blog posts, the criminal FCA provides for substantial penalties and sanctions for violators. The government recognized that this could create scenarios where people are afraid to report violations because of potential retaliation, so Section 3730(h) of the FCA includes provisions designed to protect whistleblowers from retaliatory actions by their current or former employers, as discussed more fully below.

How Are Employees Protected Against Retaliation from their Employers under the FCA?

Section 3730(h) of the FCA reads in part:

“Any employee who is discharged, demoted, suspended threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer, because of lawful acts done by the employee on behalf of the employee or others in furtherance of a [qui tam action], including investigation for, initiation of, testimony for, or assistance in a [qui tam] action filed or to be filed … shall be entitled to all relief necessary to make the employee whole.”

In that section, the FCA lays the foundation that employees or former employees bringing qui tam actions are entitled to relief. That relief is then specified in the sentences that follow:

“Such relief shall include reinstatement … two times the amount of back pay, interest … compensation for any special damages … including litigation costs and reasonable attorneys’ fees … An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.”

These broad financial incentives are intended to make employees more comfortable bringing qui tam actions and put employers on notice that retaliatory action of any kind will result in stiff penalties.

What Types of Whistleblower Activities Are Protected?

Not all conduct is protected under the whistleblower protection provisions. In making the determination, courts will assess whether:

The employee in good faith believes that the employer is committing fraud against the government; and

A reasonable employee in the same or similar circumstances might believe that the employer is committing fraud against the government.

The whistleblower must also prove that he or she was engaged in protected conduct and that he or she was discriminated against because of the protected conduct.

“Protected conduct” means the employee was doing something to stop or limit FCA violations. This can mean filing a whistleblower qui tam case, but it can also just mean that the employee investigated and/or reported suspicions of fraudulent activity.

When an employee brings a retaliation claim, employers will generally try to narrow the scope of the whistleblower retaliation provision. However, Congress’ original goal and ultimate purpose of section 3730(h) are to stop employers from silencing whistleblowers. Courts reviewing whistleblower actions look at them through this lens and interpret “protected activity” and “protected conduct” broadly.

Whistleblower Protection Is not Automatic

Employees should know, while the law provides protection for them from retaliation by their employers, protection is not automatic, nor is it pre-emptive. So, an employer could very well terminate or take other action against an employee initially. The employee will have to prove the circumstances meet the requirements of the whistleblower retaliation provisions of the FCA in order to prevail.

While there is always the possibility an employer will take retaliatory action against an employee who reported a violation of the FCA, the Act’s provisions protecting whistleblowers are a major deterrent for such retaliatory actions.

At the end of the day, someone who knows or suspects a violation has occurred has a legal and ethical obligation to report the violation. Thanks to the whistleblower protection provisions of the FCA, employees don’t need to fear financial ruin for doing the right thing.

Find out what you need to know about False Claims Act retaliation by calling our legal team at 770.643.1606. Our experienced attorneys at Bothwell Law Group exclusively represent whistleblowers’ interests.

What Is the Criminal False Claims Act and What Does It Mean?

Posted on May 2, 2016June 5, 2017 by Mike Bothwell

The Criminal False Claims Act (FCA) provides that the U.S. government can take civil action to recover civil penalties and damages for false claims and payments. A basic definition of the FCA is that it is a crime for anyone to submit a false claim to the government, or to cause someone else to submit a false claim to the government, either to get money from the government or to avoid having to pay money to the government.

The “qui tam” provisions of the FCA allow anyone with evidence of fraud against government contracts or programs to bring legal action against the wrongdoer on the U.S. government’s behalf. When a qui tam action has been filed, the government has the right to join in the suit as a party (this is called “intervening”). Sometimes, the government decides not to intervene; in those situations, the person or entity who brought the claim forward initially can still decide to pursue it alone.

Note that although the qui tam provisions allow anyone with evidence to file suit, if someone else has already filed a qui tam action on the same evidence, you will be barred from bringing a lawsuit.

What Are the Elements of the FCA?

The elements of the FCA are fairly straightforward. In order for the government to prove a violation of the act, evidence must show that:

The defendant made, presented, or caused to be presented, a false claim to the government for payment or approval; or
The defendant made, presented, or caused to be presented, a false document, statement or another record to facilitate the payment of a false claim; or
The defendant conspired with others in getting the government to make payment on such a false claim or statement; and
The defendant knew that the claim or document was false or fraudulent; or
The defendant knowingly submitted the false or fraudulent claim or document knowing it was wrong or acted with reckless disregard of the claim’s truth or falsity.

It is important to note that FCA violations are often found to have occurred even if the government did not suffer any financial loss. If you are considering filing a False Claims Act suit, the best way to determine whether you’ve got a valid case to pursue is to talk with an experience attorney.

Examples of some of the more common FCA claims include:

Contract violations: These come up frequently in the areas of defense contract work and construction. This type of fraud can happen when work is a company bills for work that never occurred. Or, a company uses substandard materials – especially if they are substituted for specified materials. Or, a company receives a contract kickback.
Healthcare fraud: Fraud in Medicare, Medicaid, and other federal healthcare programs are generally proven relatively easily when an FCA violation is alleged. A few examples of cases that fall under this umbrella include a provider that charges for services that were never provided, charging for more expensive services than what were provided, providing substandard care, kickbacks, and off-label prescription drug marketing.

What Constitutes “Knowing” Under the FCA?

Anyone can be held liable in an FCA action for submitting, or causing to be submitted, a false or fraudulent claim, or a document or statement supporting a false or fraudulent claim as long as it is shown they had either actual knowledge that the claim, document or statement was false or fraudulent; or in deliberate ignorance of the claim’s, document’s or statement’s truth or falsity.

The FCA offers three different definitions of “knowing,” as follows:

Actual knowledge
Acting in deliberate ignorance (looking the other way)
Acting in reckless disregard

The first definition is straightforward. However, the second and third are open to some interpretation by the courts based on the evidence of the case. Again, it’s best to have an experienced FCA attorney review your case. This will ensure you’re on the right track before you move forward.

What Damages and Penalties Do Violations of the FCA Carry?

The FCA carries steep penalties for violations, including an award of three times the amount of its loss, plus penalties of $5,500 – $11,000 per false claim/false document used. There’s a provision that says someone who self-reports under certain conditions may be liable for a lesser amount; however, in no case less than double the amount of the government’s loss.

To learn more about whistleblower defense and the criminal False Claims Act, call 770.643.1606 today.