The False Claims Act, 31 U.S.C. § 3729 et seq., allows for a private individual, or "whistleblower," with knowledge of past or present fraud committed against the federal government to bring a lawsuit for the government.
The private person or "whistleblower" can bring a lawsuit where a defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The whistleblower does not need to have been personally harmed by the defendant's conduct. However, the information must not be public knowledge, unless the whistleblower qualifies as an "original source."
The False Claims Act is a federal law which allows whistleblowers to file actions against federal contractors which is based on the federal contractors' fraud against the government. The act of filing such actions is informally called "whistleblowing." Persons filing under the Act stand to receive a portion (usually about 15-25 percent) of any recovered damages. The claims are usually filed by persons with insider knowledge of false claims which involved health care, military, or other government spending programs.
An individual whistleblower must be represented by a lawyer- or he or she may not bring a qui tam action under the False Claims Act.
Qui tam actions are filed under seal which prohibits the defendant from disclosing even the mere existence of the case to anyone, including its shareholders. The government may subsequently, without disclosing the identity of the plaintiff or any of the facts, begin taking discovery from the defendant.
"Whistleblower" can mean many things. Sometimes it means any person who reveals misconduct by his or her employer or another business or entity. The misconduct may be in the form of breaking the law, committing fraud, or corruption. And a whistleblower who exposes fraud on the government can bring a qui tam lawsuit on behalf of the government, and can receive a share of the recovery as his or her reward.
An example of a successful Qui Tam case was reported by The Department of Justice: "A hospital group based in McAllen, Texas, has agreed to pay the United States $27.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute between 1999 and 2006, by paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group, the Justice Department announced today."
Another Qui Tam example case involved a former Pfizer Inc. sales representative who was awarded $51.5 million ($51,000,000.00) for his role as a whistleblower in the investigation of Pfizer's marketing practices of Bextra. Pfizer pled guilty to various civil and criminal charges and paid $2.3 billion to the government.
