Tuesday, October 5, 2010

The Federal False Claims Act is looking for Whistleblowers

Permits the federal government to recover damages and penalties against persons who knowingly submit false or fraudulent claims to the government for payment or approval. 31 U.S.C. § 3729.

More importantly, the Act allows a private citizen to commence and prosecute a civil action on behalf of the United States, known as a “qui tam” action. 31 U.S.C. § 3730(b)(1). The purpose of the qui tam provisions of the False Claims Act is to encourage private individuals who are aware of fraud being perpetrated against the Government to bring such information forward. United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir.1990) The Act designed to encourage and reward whistle-blowing.

If the action is successful, the individual initiating the action, known as the “relator” or “qui tam plaintiff”, is entitled to a portion of the recovery. 31 U.S.C. § 3730(d)31 U.S.C. § 3730(d). The Act sets forth the following procedure for “qui tam” actions. The relator must file the complaint in camera and serve the government with the complaint and “written disclosure of substantially all material evidence and information.” 31 U.S.C. § 3730(b)(2). The government then has 60 days to decide whether to proceed with the action. Id. If the government decides not to join the action, the relator has the right to conduct the action on the government's behalf. 31 U.S.C. § 3730(c)(3). The government may, however, intervene at a later date upon a showing of “good cause.” If the government does intervene, it assumes primary responsibility for the prosecution of the case, and is not bound by any act of the relator. 31 U.S.C. § 3730(c)(1). The relator remains as a party to the action, however, subject to certain limitations set forth in the Act. Id. Specifically, the government may dismiss the action notwithstanding the objections of the relator, provided, however, that “the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.” 31 U.S.C. § 3730(c)(2)(A).

This act covers all instances in which a private entity, individual or corporation, submits a false claim for reimbursement to the government. The Act encourages whistle-blowing by handsomely rewarding those with the fortitude to speak up. Share this post :
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