Craig Thomas, a former employee of Tacoma-based Sound Inpatient Physicians, Inc., will receive $2.7 million of a $14.5 million settlement in a whistleblower lawsuit under the federal False Claims Act (“FCA”). The Puget Sound Business Journal reports that Sound agreed to pay the sum to the United States government to settle claims that Sound had fraudulently overbilled the government for medical services. Thomas’s share of the settlement is his reward for bringing a whistleblower claim.
Thomas is one of many whistleblowers who learned that under the FCA, it pays to be honest. The law entitles a whistleblower to 15-30% of the government’s recovery from a whistleblower claim. Because the FCA encourages and rewards people who help fight fraud against the government, it is important to understand how the law works.
What is the FCA?
The False Claims Act is intended to punish anyone who knowingly makes a false claim for money or property from the federal government. For every false claim a person makes, the government can recover triple damages and a civil penalty between $5,500 and $11,000. The following actions are punishable under the FCA:
-Presenting, or causing someone else to present, a false claim for payment
-Making or using false records or statements that relate to a false claim, or causing someone else to do so
-Avoiding making payments to the government or concealing debts owed to the government
-Conspiring to commit any of the above acts
To be liable under the FCA, the person must have knowledge that he is making a false claim. Even if the person does not actually know the claim is false, he can still be punished if he intentionally avoided learning the truth or recklessly ignored whether the claim was true or not.
How Do Whistleblower Lawsuits Work?
When a person discovers fraud against the government, the FCA allows that person to bring a whistleblower lawsuit, also called a qui tam lawsuit, on the government’s behalf. The person who brings a qui tam lawsuit is known as the relator.
When someone believes that a person or company is violating the FCA, he can file a qui tam lawsuit. To do so, the relator (or his attorney) files a complaint with the court and government attorneys. The government then investigates the claim and decides whether it wants to intervene in the lawsuit. If it intervenes, it takes over the case. If it does not, the relator can continue with his claim.
If the government wins the case, then the defendant must pay a penalty for each false claim, plus up to triple damages. The defendant must also pay all of the court costs and attorney’s fees. The relator is entitled to 15-30% of whatever money the government recovers through a judgment or a settlement.
The FCA is a powerful tool to help the government combat fraud. Since 1987, the Department of Justice has recovered over $35 billion from people and companies who defrauded the government, with over $24 billion coming from qui tam lawsuits. Relators have received over $3.8 billion in awards. If you believe that someone is violating the FCA, an employment lawyer can help you pursue a qui tam claim.