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Whistleblower or "Qui Tam" Litigation |
| Increasingly, government enforcement activity against corporations is prompted by allegations brought forward by company insiders or “whistleblowers.” As a result of federal legislation, the modern day whistleblower is often a well-placed and/or well-informed, current or former corporate insider motivated to reveal suspected fraud against the government by the opportunity to share handsomely in any recovery that results from his information. |
| Congress breathed new life into the False Claims Act in 1986 when it amended the statute’s “qui tam” or whistleblower provisions to further encourage and reward whistleblowers to reveal information they knew involving fraud by government contractors or others participating in federal programs. Whether used against individuals who misrepresent their entitlement to federal subsidies or other benefits, or against corporations that overcharge the government on multi-billion dollar defense or construction contracts, prosecution under the False Claims Act carries with it liability for treble damages as well as onerous civil penalties. Nowhere has False Claims Act litigation been more prevalent recently — and resulted in settlements in the hundreds of millions of dollars — than in the healthcare industry. Whistleblowers who alert the government to such fraudulent schemes often walk away from a successful civil prosecution or settlement with as much as 30% of the government’s oftentimes substantial recovery. |
| Our firm has successfully defended corporate clients in large and complex qui tam actions. We have frequently persuaded the government that a whistleblower’s allegations are factually unsupported or, if supported, that the conduct at issue does not amount to a violation of the False Claims Act, was not relied upon by the government and/or did not result in damages. Where our clients have elected to settle rather than litigate False Claims Act liability, we have assisted them in negotiating favorable settlements and further counseled them with respect to (1) avoiding administrative sanctions such as suspension or debarment and (2) entering into multi-year compliance/integrity agreements with government agencies. |
| Often, qui tam actions include allegations that the corporate defendant retaliated against and/or terminated a whistleblower after learning that he or she was considering filing a qui tam lawsuit or had already done so. The whistleblower protection provisions of the False Claims Act proscribe adverse employment actions taken as a result of an employee’s activities in furtherance of investigating and/or disclosing suspected fraud against the government. We routinely defend our clients against these sorts of allegations — and recently succeeded in getting a whistleblower retaliation suit dismissed in its entirety as a sanction for the whistleblower’s intentional erasure of files from his company-owned computer. |
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