Qui Tam “Whistleblower” Lawsuits – Getting Taxpayers’ Money Back

Q: If a contractor is found to have committed fraud against either the State or Federal governments, what are the consequences?
A: Under the U.S. False Claims Act, the liable contractor will be fined triple damages, based upon the value of the goods/services that should have been provided. In addition, each individual count of fraud (where one fraudulent invoice = one count) is hit with a second penalty of at least $5,500, but no more than $11,000.

To reward relators for helping the Government recover funds, the relator will receive an amount equaling 10% to 30% of the recovered funds. This amount can be lowered or raised, depending upon the amount of time and effort that the relator (and his or her attorney) have devoted to gathering detailed proof of the fraudulent conduct. This amount can also be lowered if the relator does not cooperate with Federal prosecutors, or delays delivery of information to the Government in the hopes of securing a larger recovery.

These financial awards can be significant. From October 1, 1986 to September 30, 2009, the share of recovered funds awarded to relators in cases that the U.S. Government joined equaled over $2.3 billion dollars (for additional information, see Appendix D of The False Claims Act: Fraud Against the Government, Second Edition by Claire M. Sylvia).

Over the same time period, the share of recovered funds awarded to relators in cases that the U.S. Government did not join equaled over $82 million dollars (also from Appendix D of The False Claims Act: Fraud Against the Government, Second Edition).

Parties found liable for fraud under the California False Claims Act are subject to similar penalties. California “whistleblowers”/relators are also eligible to receive a slightly larger portion of the recovered funds – between 15% and 50% - depending upon whether or not the Government takes up the case, and the same factors mentioned above (amount of work done and/or evidence submitted, willingness to cooperate with the Government’s investigation, etc.).