The federal False Claims Act is one of the government’s primary weapons to fight fraud. Since 1987, the Act has been responsible for recovering $15 billion of misappropriated government funds. Of that amount, $9.6 billion was recovered in cases filed by whistleblowers.
During this same period, whistleblowers received $1.6 billion for their efforts in filing these qui tam cases. Under the Act, the government has the primary responsibility for prosecuting qui tam cases. Thus, a whistleblower files a complaint under seal in the appropriate U.S district court. At the time of the filing of the complaint, a copy of the complaint is served on the Attorney General and the appropriate U.S. Attorney. The complaint remains under seal for 60 days (almost always for much longer) while the federal government evaluates the case.
The Department of Justice is the agency with primary responsibility for deciding on behalf of the federal government whether or not to join in prosecuting the claim. Should the Department of Justice determine that they are going to join in prosecuting the claim, the level of involvement of the whistleblower varies case by case at the discretion of the Department of Justice.
Obviously, the greater the level of involvement of the whistleblower, the greater the whistleblowers share of the recovery. In the event that the Department of Justice on behalf of the federal government declines to intervene, the whistleblower and their counsel must determine if it is prudent to pursue a claim on their own.
Since 1987, the Department of Justice have received almost 9000 False Claims Act cases. In cases where the Department of Justice decided to intervene, the median time to conclusion was approximately 38 months.
In addition to the Federal False Claims Act, many states have implemented their own versions of the False Claims Act. While each states Act may vary slightly, their goal is rooted in the same principal of preventing state and local government fraud. The states that have false claims laws in place are:
- New Hampshire
- New Mexico
- District of Columbia