Qui Tam Whistle Blowing

QUI TAM LITIGATION

Federal Contractors have a duty to treat the federal government fairly. They must follow all the federal rules and regulations that are applicable to the federal contract and they must provide the product or service that they promised to provide. A claim that is made for services not rendered is illegal. It is a false claim.

Since 1863, the federal government has recognized that it can not possibly uncover all the false claims that are made by federal contractors. On March 2, 1863, President Lincoln signed the False Claims Act. 12 Stat. 696.1 The most significant part of the law is that it provides a reward for whistlebowers who step forward and file suit on behalf of the federal government.

The modern False Claims Act, 31 U.S.C. §§ 3729–37332, retains this essential feature. Whistleblowers are encouraged to hire a lawyer and file suit against the wrongdoer on behalf of the federal government. In false claims litigation, the whistleblower is called the “relator” and the whistleblower’s lawyer is a “Private Attorney General.” 

The Whistleblower collects the money that is owed to the government and receives a portion of final award. The reward can be as much as 30% of the money recovered on behalf of the federal government.

If you know of any false claims call us at 412-391-2515

The use of the word “reward” is a little misleading, because both the relator and his, or her, lawyer work very hard to recover the money that was wrongly taken from the government by the contractor when the contractor made its false claim for payment.

The relator’s lawyer works closely with the United States Attorney’s office. At the outset the relator’s lawyer prepares a complaint and a full written disclosure of the information known to the relator. The complaint is filed in court under seal, and a copy of the complaint and full written disclosure is given to the United States Attorney’s Office.

The government is given 60 days, or more, to evaluate the information provided and determine whether it wishes to take over the case. During this 60 day window, the relator is generally interviewed by the FBI. The FBI then does its own investigation and reports back to the U.S Attorney. The relator does not generally get a copy of the FBI investigation report because FBI investigations are confidential.

In most cases, the government does not intervene. The seal is lifted and the relator and his, or her, lawyer are permitted to proceed with the litigation.

A copy of the complaint is served on the contractor and the litigation begins. The key to the case is to gather enough evidence through discovery to prove the false claim.

A false claim for services is generally made on a standard claim form and the claim form can be very telling. For example, when medical doctors or pharmacies make a claim for medicare reimbursement they generally use claim form RRB – 1500.

This form has a box that asks the federal contractor to list the “PROCEDURES SERVICES, OR SUPPLIES.” Within this same box the federal contractor is asked to “Explain Unusual Circumstances.”

This requirement that the federal contractor explain unusual circumstances is often the easiest way to prove medicare fraud. For example, if a medical doctor “upcodes” a service by listing it as a high priced specialty service instead of a routine visit, the failure to explain this unusual circumstance on the form RRB-1500 is a false claim.

Similarly if a pharmacy knowingly fails to maintain a pump that is used by a patient to automatically dispense the prescribed medication, and the pump no longer meets government specifications, the failure to disclose these “unusual circumstances”, on the claim form 1500 is a false claim.

It is the responsibility of the relator and his, or her, lawyer to gather the proof that the services were not rendered as promised and that the contractor made a false claim for services not rendered.

The relator can not count on help from the federal contractors. Most federal contractors are supervised by other federal contractors. No claim is paid to anyone unless the claim is first approved by the supervising contractor. Therefore, proof that a false claim was made and paid, can be an embarrassment to the supervisor.

Help can come from unexpected sources. Most large federal contractors have a federal compliance officer on their payroll.

The compliance officer is generally required to gather basic information about the federal contracts on a routine basis. The compliance officer also gathers and investigates the complaints made by whistleblowers and creates a record of the investigation. Thus, the compliance officer is often a good source of information.

False Claims litigation can be settled before going to trial. The terms of the settlement are generally worked out between the relator and the federal contractor, but no settlement can be signed without the approval of the United States Attorney’s office and the court.

WHO MAY BE A RELATOR

Essentially anyone can be a relator, provided that they have the information necessary to file suit against a federal contractor.

However, it is unusual for a relator to have first hand knowledge of all the information needed to prove wrongdoing.

Typically a relator is an employee of a federal contractor in the billing department.

The employee knows that claims are made for services rendered without any explanation of unusual circumstances, and has heard from other sources that service being billed was never provided, but has no first hand knowledge of the production problems.

Alternatively a relator may be an employee of a federal contractor, who works in the production department, knows that the services are not being provided as promised and has heard from other sources that the services are being billed as though nothing was wrong; but once again the relator has no first hand knowledge of the billing.

Occasionally a relator is a person with no inside information at all. For example, he relator is a bystander who has observed a coal barge that appears to be violating EPA standards by pumping a plume of red acid mine drainage into the river as it moves downstream.

The relator has no first hand knowledge that the coal is being delivered under a federal contract or the that the dumping is sufficient to constitute an EPA violation. The relator has reported the matter to the Coast Guard, however, and a newspaper account of the incident has filled in the details.

Under these circumstances the whistleblower may file suit provided that he can prove himself to be an “original source” of the information.

A relator need not have all the answers. The relator’s law suit is filed under seal, based on knowledge, information, and belief. The contractor does not know that suit has been filed.

The relator, thorough his or her own lawyer, makes a complete disclosure to the United States Attorney when suit is filed and waits for the results of the government’s 60 day investigation.

If the United States Attorney finds that there is no claim to be made, the United States Attorney can ask the court to dismiss the case filed by the relator before the papers are served on the federal contractor.

Sometimes there is more than one whistleblower. In that event, the first to file a law suit proceeds and the second to file lawsuit does not; however, both lawsuits may proceed if the second to file adds new information.

Additionally, if the government has already filed its own action, then both whistleblower law suits are dismissed.

Some people do not qualify to be relators. No one in the military can file false claims litigation against another member of the military arising out of the relator’s service in the armed forces. However, military personal can file false claims litigation against federal contractors because a contractor is not a “member of the military.”

WHAT IS A FALSE CLAIM?

Generally, you know a false claim when you see it. If the contract was procured by deception, the product or service delivered was not what was promised, or the federal contractor cut corners and failed to comply with federal regulations, then a claim for payment is a false claim.

To prove a false claim, it is generally necessary to get a copy of the contract documents. There will be a signed contract, a collection of contract specifications, and host of federal regulations.

The key documents depend on the nature of the false claim. If the government contract was procured by deception, then the bid documents are essential.

If the product or service did not conform to standards, then the contract specifications are essential. If the contractor failed to comply with the regulations then the federal regulations are essential. For example, if a contract is procured by deception, it does not matter whether the contract was performed according to the specifications.

On the other hand, if a contract was not performed as promised, it does not matter whether the contract was procured by legitimate means.

The search for contract documents usually starts by identifying the several federal agencies involved. There will be an agency that placed the work up for bid, an agency that supervises the work of the wrongdoer, and an agency that administers the federal regulations.

Much of this information is now available on the internet.