{"id":357892,"date":"2016-04-04T10:45:32","date_gmt":"2016-04-04T15:45:32","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/employment\/whistleblowers\/awards-in-qui-tam-actions.html"},"modified":"2024-03-28T12:11:53","modified_gmt":"2024-03-28T17:11:53","slug":"awards-in-qui-tam-actions","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/employment\/whistleblowers\/awards-in-qui-tam-actions.html","title":{"rendered":"Guide to How Awards in Qui Tam Actions Work"},"content":{"rendered":"\n
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Guide to How Awards in Qui Tam Actions Work<\/h1>\n
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\n By Olivia Wathne, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

A qui tam action is when a private citizen reports fraud against the government. This is known as whistleblowing<\/a>. Qui tam actions carry with them the potential for large monetary judgments. A part of that judgment goes to the person who initiated the action. <\/p>\r\n

Read on to learn more about whistleblower rewards in connection with qui tam actions<\/a>.<\/p>\r\n

Common Types of Qui Tam Actions<\/h2>\r\n

There are various types of fraud reported in qui tam actions. A majority are meant to defraud the government and taxpayers. Healthcare fraud<\/a> involves providers submitting false claims for services not provided. It can also involve inflating billing amounts. This is common in programs like Medicare and Medicaid<\/a>. <\/p>\r\n

Procurement fraud includes fraudulent contracts or bids for government goods or services. Financial fraud encompasses misrepresenting financial information to government agencies like the IRS. <\/p>\r\n

Fraudulent activities may also occur in government contracts, with companies engaging in kickback schemes or submitting false invoices. Whistleblowers play a crucial role in uncovering these activities and holding perpetrators accountable.<\/p>\r\n

Qui Tam Award Requirements and Eligibility<\/h2>\r\n

Qui tam award requirements are outlined under the federal False Claims Act<\/a> (FCA). The FCA empowers whistleblowers to report fraud on behalf of the government through qui tam lawsuits. To qualify for an award, whistleblowers must provide original information about types of fraud that violate the law. This information should lead to a successful recovery of funds by the government.<\/p>\r\n

The FCA includes qui tam provisions that incentivize individuals to report fraud. It does this by offering a percentage of the recovered funds as an award. Whistleblowers must file their complaints under seal, ensuring confidentiality during the government’s investigation. <\/p>\r\n

If the government declines to intervene, whistleblowers may proceed with the lawsuit on their own. <\/p>\r\n

Adhering to these requirements is essential for whistleblowers seeking to report fraud.<\/p>\r\n

Qui Tam Action and Award Process<\/h2>\r\n

Navigating the qui tam award process involves several key steps. Following these steps ensures that whistleblowers are protected throughout the process. It also increases the likelihood of a successful outcome.<\/p>\r\n

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  1. Reporting Fraud<\/b>: A private citizen, known as a relator, reports fraud against the government by filing a complaint in federal court. This complaint details the alleged fraudulent activities.<\/li>\r\n
  2. Government Investigation<\/b>: The government reviews the whistleblower’s complaint. It then investigates the allegations. This investigation is conducted in secret while the complaint is under seal.<\/li>\r\n
  3. Government Intervention Decision<\/b>: After investigating, the government decides whether to intervene. If they do, they take over the lawsuit. If not, the whistleblower may proceed with the lawsuit on their own.<\/li>\r\n
  4. Litigation<\/b>: If the government intervenes, they lead the litigation process. If not, the whistleblower’s legal team handles the case. The lawsuit proceeds through the legal system. This is when both sides present evidence and arguments.<\/li>\r\n
  5. Award Distribution<\/b>: If the lawsuit is successful, the whistleblower may receive a portion of the funds as a reward. This award is typically a percentage of the recovered amount. It often ranges from 15% to 30%, depending on various factors.<\/li>\r\n<\/ol>\r\n

    Qui Tam Damages and Penalties<\/h2>\r\n

    A defendant found liable in a qui tam action faces significant consequences. They may be liable to the federal government for treble damages. This means three times the amount of monetary damages sustained by the government. If the defendant gives full cooperation with the government’s investigation, their liability may be reduced to double the amount of damages sustained.<\/p>\r\n

    Defendants found liable may also be required to pay a penalty for each false claim submitted. This penalty is determined by the court and adjusts with inflation. As of February 2024, the penalties ranged between $13,946 and $27,894 per claim. <\/p>\r\n

    Whistleblowers may also be entitled to receive special damages<\/a>. Special damages can include back pay, reinstatement to their former position, and reasonable attorneys’ fees. These additional remedies help protect whistleblowers and encourage them to come forward to report fraud against the government.<\/p>\r\n

    Qui Tam Award Amount<\/h2>\r\n

    The FCA provides a significant monetary incentive for bringing a qui tam action. The person who initiates a successful qui tam suit receives a portion of the penalty and damage award. This award is:<\/p>\r\n