The False Claims Act is a federal statute under which whistleblowers, called relators, can report fraud against the government by filing a qui tam lawsuit. These lawsuits are generally based on insider information that the government may not have been able to discover on its own.
In return for providing this vital information, and in some cases even standing in the shoes of the government and litigating the case themselves, the relator receives a percentage of any civil recovery.
The False Claims Act attorneys at Bracker & Marcus LLC represent these relators. We ensure that their story is told in the most meaningful and convincing way so the government will intervene and hopefully settle their qui tam lawsuit.
That is the False Claims Act, or Lincoln’s Law, in a nutshell. But for those who want a deeper understanding of the federal government’s primary tool in its ongoing fight against fraud, read on.
Relators and Attorneys Both Bring Vital Experience
Our False Claims Act attorneys specialize in the art of preparing qui tam cases. To do this, we work closely with our clients, using our knowledge and experience to draw out every piece of relevant information that could help the government conduct its investigation.
However, familiarity with the False Claims Act is only half the battle. A government fraud attorney is most effective when they have experience with the particular type of fraud being alleged, as well as the rules and regulations at issue. Not only are we able to focus our efforts on what matters most, but our prior experiences enable us to uncover claims that our clients were not even aware of.
But we also rely extensively on our clients’ training and understanding of their fields. They have been immersed in their profession for years, sometimes decades, and have real-world experience that lawyers do not. They lived the fraud, saw it firsthand, talked with the people conspiring to defraud the government, and dealt with the patients or customers who were victimized as a result.
Lawyers should never take for granted the value that relators bring to this process.
Great False Claims Act Attorneys Believe In Teamwork
From the moment of engagement, we stress the importance of working as a team. We are in this together, partners in this journey. We prepare the law, relators bring the facts. Together, we are able to do great things.
And so we start with an in-depth interview. We walk through all the pertinent facts with the clients to ensure that we have a complete understanding of the fraud at issue.
Once we have an understanding of the allegations, we get to work drafting a disclosure statement.
The False Claims Act requires that we present the government with a “written disclosure of substantially all material evidence and information the person possesses.” This document is our opportunity to show the government that not only is there a fraud being committed, but that it can be proven.
We provide a roadmap for the government to conduct its investigation. We give it every shred of detail in our possession, not just the general allegations and the legal basis for our claims, but whatever information may assist in uncovering the necessary evidence to prove the fraud. We review this document multiple times with the client until we are certain of its accuracy and convinced there is nothing more we can add.
This document will later be shared with the government and generally remains confidential; it is not part of the public record.
Next, we review all of the documents in our client’s possession. This exhaustive review includes business records, emails, text messages, recordings, and anything else that might be of use. All of these documents will ultimately be presented to the government to aid in its investigation. Therefore, it is vital that the relator’s counsel has reviewed them, is familiar with them, can answer any questions about them, and uses them to add further details to the disclosure statement.
We then prepare our complaint. This is the sworn pleading that gets filed with the court to initiate the False Claims Act lawsuit.
Though the complaint contains much of the same general information as the disclosure statement, experienced False Claims Act lawyers understand that there are important differences in how to treat these two documents.
The disclosure statement should lay out the game plan for trying the case; this is not information you want the defendants to see. The complaint must include mundane information to establish jurisdiction and to meet the court’s pleading standard; you don’t want to bog the disclosure statement down with this legal jargon.
We Assist the Government to Investigate Allegations of Fraud
When everything is ready, we inform the government that we are going to file a qui tam lawsuit. A qui tam case is one where the relator is filing on behalf of the government. The relator is a “party”, but the government is the “real party in interest.”
This is because it is the government that was the victim of the fraud, not the relator. So it is the government that has the most control over how, or even if, the case is litigated or settled. Moreover, this means that a relator is required to have a False Claims Act attorney since the government does not want a layperson representing it in court.
False Claims Act lawsuits are filed under seal. This means that only the court and the government know of its existence. This secrecy allows the government to conduct its investigation without the defendant initially being aware. This is important because it prevents unscrupulous defendants from destroying or fabricating evidence, and it protects the identity of the relator during this complicated time.
Within the first eight weeks or so, the government will interview the relator. It will use the complaint, the disclosure statement, and all the documents to repeat the process of learning everything it can, looking for information that we may have missed.
Once this is done, the government conducts its investigation. These investigations usually take two or three years. When cases are particularly large or difficult to prove, they can take many years. During this time, the case remains under seal, so ideally, nobody knows that the relator is a relator, or that a False Claims Act case was ever filed.
Although the relator is scarcely involved during the investigation after the interview, trustworthy relator’s counsel are often asked to assist the government in its review. We are routinely asked to assist with preparing subpoenas (known as Civil Investigative Demands), performing document review projects, researching legal questions and drafting memoranda, and other tasks that help to move the investigation along.
The Government Decides Whether to Take the Case
When the government completes its investigation, it has a decision to make. It can intervene in the lawsuit, meaning that it takes the case over from the relator. This generally means that the government is convinced that it can win the case. Typically, that means that the defendant realizes it is in serious trouble and settles the claims.
However, that is not always the case, and so the federal government may end up litigating against the defendants. The relator is still involved, and the relator’s counsel works closely with the government to litigate the matter, but the government takes the lead. This also means that, for the most part, the government can settle the case without the relator’s involvement, or even dismiss the case if it has reason to do so.
The government can also decline to intervene. This means that the government has decided not to take the case on. Some of the most common reasons are that there was not sufficient evidence to prove the case; the factual allegations did not amount to a False Claims Act violation; the affected agency does not consider the violations to be serious enough to pursue the claims; or the damages are too small.
Regardless of the decision, the case is now unsealed. The complaint becomes part of the public record and parties may (or may not) learn of the lawsuit.
You and Your Counsel Must Decide Whether to Litigate a Declined Case
If the government does not intervene, relators generally have the opportunity to litigate the case themselves on behalf of the government. This is also the first time that a relator can try to settle the claims, but it still requires government approval.
Thus, just as the government had a decision to make, now the relator and their False Claims Act lawyers have a decision to make. If the government declines the case, does the relator want to litigate it?
This is the most important decision of the entire process.
Some so-called False Claims Act lawyers don’t litigate declined cases. Qui tam lawsuits are expensive, difficult, and time-consuming. It can come as quite a shock to the relator to learn that after years of working together, their legal counsel is asking them to change horses in midstream.
For this reason, relators choosing legal counsel must ascertain (1) whether they think the case can be litigated in declination, and (2) if they are willing to do it. If a lawyer says they don’t litigate declined cases, run! Even if you never intend to actually litigate it yourself, it is unlikely that this attorney can truly recognize the strengths and weaknesses of your claims.
Bracker & Marcus LLC litigates declined qui tam cases. But we also know our limits, as we are a small firm often litigating against thousand-dollar-an-hour mega-firms. We give up a percentage of our fee to associate with fellow experienced False Claims Act attorneys. In other words, we stay on your case and bring on reinforcements at no additional cost to you.
There are also risks to the relator when litigating a declined case, and so it may not be in their best interest to litigate. Relators are human beings with jobs and lives that they can’t necessarily upend to try a lawsuit. It is just as important to determine if a False Claims Act lawyer will agree to let you dismiss a declined qui tam if you do not want to move forward. Because they will have hundreds of hours and thousands of dollars in fees and costs invested in your case, and it may not sit well with them that you want to walk away from a possible payday.
Our Atlanta whistleblower attorneys think that it only makes sense to litigate declined cases if everyone, lawyer and client, wants to do so. We advise our clients to the best of our ability as to the process, their chances, the risks, the costs, and the potential rewards, so that we, together, can make the best choice for all of us.
In a Successful Qui Tam, Counsel and Client Receive a Percentage of the Recovery
Congress realized that few people would go through the long process of filing, let alone litigating, a qui tam case if there were nothing in it for them. So it authorized a relator’s share, meaning a percentage of the government’s recovery. If the case is intervened, then the relator receives between 15% and 25% of the recovery. If the case is declined, then to encourage relators to litigate without the Government, they receive between 25% and 30% of the recovery.
The relator’s share is then divided with your False Claims Act attorneys, who are working on a contingency fee. This means that unless we win, we don’t get paid. We are in it together, all or nothing, win or go home.
The recovery itself involves three factors.
What were the government’s actual damages?
In other words, how much money did the harm cost it? Depending on the type of fraud, the method of this calculation may vary. Let’s say the allegation is that the defendant billed Medicare for an expensive medical procedure that was not actually performed.
If the defendant was not qualified to perform the procedure, then the damages are the entire amount paid, because the government did not receive the benefit of the bargain – a service performed by a qualified provider. If the defendant performed a cheaper procedure but billed for the more expensive procedure, then the damages are the difference in reimbursement, because the government did receive the benefit of the cheaper service.
The statute trebles damages.
“Trebling” means the damages are tripled. This is because defrauding the government is a serious violation, and you don’t get to just “pay the difference” and walk away. In other words, the actual damages are the restitution, and the trebling is the punishment.
If the case goes to trial, the defendant may be responsible for civil monetary penalties.
For every false claim the defendant submitted to the government, or every false record or statement it made that was material to a false claim, a substantial penalty may be assessed against the defendants.
In addition to these damages, a defendant may be responsible for the relator’s counsel’s attorney’s fees. This is separate and unrelated to the relator’s share and the contingency fee, which is based entirely on the government’s recovery. Rather, to incentivize qui tam lawyers to take these high-risk cases, and to allow us to front all the fees and costs of a lawsuit, we are able to bill the defendants for our time.
The risk of having to potentially pay for two sets of attorneys, plus penalties, can drive even the most obstinate defendant to settle a False Claims Act lawsuit.
Call the False Claims Act Attorneys at Bracker & Marcus LLC for a Free Consultation
That concludes our high-level view of the False Claims Act. If you have any questions, or if you are aware of fraud being committed against the government, give us a call at 770-988-5035. Our consultations are always free, and we would be happy to talk with you about your potential or existing case.