Law Office of  Daniel S. Kozma

Whistleblower-False Claims Act

In its whistler-blower provisions, the Federal False Claims Act, 31 U.S.C. § 3729 - 3733, permits private citizens to sue corporations, companies and individuals who have defrauded the United States Government. If successful, the whistle-blower can receive up to thirty percent (30%) of the recovery as a reward, or bounty, for having bought the case.

The False Claims Act provides powerful remedies for government fraud. Every false or fraudulent claim, or false or fraudulent statement made to get a false or fraudulent claim paid, is a separate violation of the Act. The False Claims Act provides for recovery of trebled actual damages, a five to ten thousand dollar ($5,000.00 - $10,000.00) penalty for each fraudulent claim and false statement, and for an award of attorneys fees and costs to the successful whistle-blower. The monies recovered go to the United States, but the whistleblower can get up to 30% of the monies recovered as a reward for reporting the fraud. Because actual damages are trebled and because of the statutory penalties, whistleblower cases can produce large recoveries for the Federal Government and for the whistle-blower.

A classic example of false claim is where the U.S. Government contracts to buy the proverbial widget and testing to determine compliance with Government widget standards is required, not done, and the contractor nevertheless certifies that the testing was done and that the widget complies with Government standards. Another example, in the healthcare field, is billing the government for services that are not necessary, or not performed at all. For example, a patient needs a blood test to determine if "X" in his blood. Instead of just testing for "X," the healthcare provider also tests for "Y" and "Z" when it is not medically necessary to do so, but falsely certifies the tests were necessary and charges the government for all three tests, or charges the Government for "Y" and "Z" tests but does not do those tests.

There are specialized procedures that must be followed in a False Claims Act case. The case is filed by the whistle-blower under seal and the United States Attorney has an opportunity to investigate and decide whether the United States will enter the case and take it over. Some U.S. Attorneys in some cities appear to be aggressive in joining in and taking over whistle-blowers' False Claims Act cases, and others are less aggressive in joining whistle-blower suits. The Department of Justice seems particularly interested in cases involving Medicaid/Medicare and other healthcare frauds, and frauds committed by defense contractors.

The whistle blower is entitled to 15-25% if the government intervenes and takes the lead in the case, and between 25-30% if the government does not intervene. The specific percentage is usually a matter of negotiation between the whistle blower and the Department of Justice. It depends upon factors such as the quality of the whistle blower's information and the time and effort put into the case by the whistle blower and his counsel. The Justice Department has in the past taken the position that it will not agree to the full 30% recovery, unless the whistle blower has taken the case to trial.

The Federal False Claims Act also prohibits a company from firing you because you have "blown the whistle" on fraudulent claims or false statements. The False Claims Act prohibits an employer from retaliating against a whistle blower or anybody cooperating with a whistle blower or the United States Government. The False Claims Act allows you to sue your employer for any type of retaliation against you and entitles you to collect double back pay, plus attorney's fees and any costs incurred in bringing your retaliation claim.

The District of Columbia and most states now have False Claims laws and whistle-blower protection laws, too, modeled on the Federal law.

If you have personal knowledge that a particular corporation or company is defrauding the Federal Government or the District of Columbia Government, contact me at (202) 969-2223 for a free consultation.

Law Office of Daniel S. Kozma

2120 L Street, N.W., Suite 700
Washington, D.C. 20037

Phone: (202) 969-2223

Fax: (202) 822-3999