False Claims Act Attorneys / Qui Tam Lawyers

Most investigations under the False Claims Act are not initiated by federal agencies, but instead by current employees, former employees and competitors who report suspected violations to the government. The False Claims Act contains a provision that allows private citizens (referred to as “relators”) to file qui tam lawsuits to recover monies on behalf of the United States. A qui tam lawsuit must allege that an individual or a business has defrauded the federal government by submitting a false or fraudulent claim (or multiple false or fraudulent claims).

Filing a Qui Tam Lawsuit: What to Expect as a Plaintiff

What can you expect as a plaintiff in a False Claims Act lawsuit? Here is an overview of the qui tam process:

Complaint. The qui tam relator (the plaintiff) files a complaint against an individual, a business, or both (the defendants) in federal court. To protect the anonymity of the plaintiffs, qui tam lawsuits are filed under seal and the court’s clerk will provide a copy of the complaint only to the assigned judge and certain government officials at the U.S. Attorney’s Office. Extensions to keep the case sealed are regularly granted for segments of six months and can be renewed until the government had a chance to investigate the matter.

Evidence. The government will immediately reject entirely unsubstantiated complaints. However, if a complaint appears to be substantiated, the government may investigate the facts with the help of federal law enforcement agencies such as the FBI, the DEA, or the U.S. Attorney’s Office. This factual investigation is typically done through OIG subpoenas that require the accused wrongdoers to produce corporate, financial, billing, business, and communications records.

Government Intervention. Upon review of these records, the government will decide if it will support the plaintiff and intervene in the case or whether it will drop out and let the relator continue on its own. Intervention requires approval from the DOJ’s Washington D.C. headquarters. If the government intervenes, the DOJ will typically amend the complaint to include additional causes of action, such as Anti-Kickback Statute and Truth in Negotiation Act violations.

Case Settlement. Parallel to the government serving subpoenas (and thereby notifying the defendants of the pending litigation), negotiations between the government and the defendants’ lawyers will typically take place. However, depending on the complexity of the case, it may take several months before the government starts evaluating a qui tam complaint and even longer before an open matter is fully resolved.

Liability and Rewards. If found liable, the defendant (or defendants) may be ordered to pay as much as three times the government’s losses plus penalties of up to $ 11,000, per claim, which can quickly amount to millions of dollars. The law incentivizes qui tam plaintiffs by allowing them to keep up to 25 percent of any amount collected if the government intervenes in the litigation and up to 30 percent if the plaintiffs collect on their own without the government’s involvement beyond the investigative stage.

Qui Tam Defense: Pre- & Post-Intervention Methodologies

Although filing a qui tam lawsuit under the False Claims Act only requires a relatively bare-bones allegation of fraud, far more evidence is required – both in substantive and procedural respects – for the litigation to progress past the opening pleading phases and ultimately result to a finding of criminal or civil liability against a given defendant. Substantiating liability under the False Claims Act is a notoriously difficult undertaking. Businesses and individuals facing accusations of government contract fraud, Medicare fraud, and other forms of government fraud will often have several potential defenses available.

Defending Against Qui Tam Allegations: What to Expect

Under the False Claims Act, there are two main routes the DOJ can pursue to advance civil claims for reimbursement and related criminal penalties against a defendant.

The first is via a government-initiated investigatory scheme. The Federal Bureau of Investigation (FBI), the Department of Health and Human Services (DHHS), and several other related federal entities routinely conduct investigations of individuals and businesses for submitting inaccurate and fraudulent claims to the government. And based upon the subsequent evidence garnered during these reviews, the DOJ can either initiate a civil lawsuit under the False Claims Act or seek criminal charges against the offender, depending on the severity of the statutory violation.

The second process that individuals and businesses can encounter potential liability under the False Claims Act is through a private citizen-originated legal action per the statute’s whistleblower/qui-tam clauses. This has both significant overlaps and unique distinguishing factors from government-initiated enforcement proceedings.

Some of the most commonly implemented defense strategies in qui tam cases under the False Claims Act include:

• Procedural Inconsistencies: As is the case in all categories of federal government litigation, relators in qui tam claims must remain complaint (and often strictly so) with the Federal Rules of Civil Procedure (FRCP). Relators would not be granted a free ‘pass’ on any technical and procedural shortcomings, regardless of any potential justifications they may attempt to offer. Calling out and formally challenging these deficiencies from the onset of the litigation proceedings can often, at the very minimum, slow down the legal process against a corporate defendant and start to raise questions from a judicial and governmental perspective about the legitimacy of the relator’s case – a key step in reducing the risk that the government will ultimately choose to dedicate its resources to advance the initial claim. This is why it’s important to have an experienced false claims act attorney on your side.
• Failing to File Requisite Disclosure Statement: In addition to the initial formal complaint (which is the document that is filed in federal court to start the qui tam legal process) the relator must also submit a disclosure statement to the Department of Justice. Specifically, this statement must include the following clause in order to be deemed legitimate in a court of law: “substantially all material evidence and information the [relator] possesses.” While the disclosure statement is not initially provided for review to the defending party, issues later made discoverable, regarding the pertinent details the relator might have overlooked when drafting the disclosure statement, may lead to grounds for seeking dismissal of the case in its entirety.
• Insufficient Evidentiary Backing to Prove Liability: In order to establish liability pursuant to the False Claims Act, the relator’s allegations and supporting evidentiary record and documentation must substantiate a judiciary’s finding of a requisite specified level of intent. In general terms, offering an inaccurate invoice or billing for payment to the government does not, on its own volition, subject an entity to liability for federal fraud under the False Claims Act. To be successful in qui tam litigation, the government and cooperating relator must typically be able to prove, at a minimum, that the defending party should have known about the purported fraudulent activity being attempted. Thus, even in instances involving legitimate allegations of false claims, defendants will oftentimes be able to offer mitigating counter evidence to avoid False Claims Act prosecution.

Proven Qui Tam Lawsuit Defense Strategies

The difference between human error and liability is often a fine line that requires convincing negotiation skills, industry experience, and attention to details. The false claims act attorneys and former government officials of Oberheiden, P.C. have handled cases throughout the United States. The following are our maxims and guiding principles:

• No Criminal Charges. Our top priority in every False Claims Act case is to avoid criminal charges. Years of experience as former federal prosecutors in charge of investigations and a focused practice on FCA litigation allow us to quickly determine whether the investigation is civil or criminal, what the government’s objectives are, and how to efficiently resolve the matter.
• No Government Intervention. As defense counsel, we vigorously confront the plaintiffs’ allegations by all means available. Doing so is critical to convince the government that the allegations lack merit and do not deserve government intervention and support.
• Favorable Resolution. In instances in which civil penalties are likely, we have negotiated our clients’ liability to a fraction of the government’s demand. To date, not a single settlement forced any of our clients to cease operations or to close their business.