A suit under the False Claims Act, also known as a “qui tam” action, allows people who have insider information of fraud against the Government, known as a “relator” or “whistleblower,” to file a suit to help stop the perpetrators from defrauding the United States Government. The False Claims Act seeks to deter fraud against the United States Government by providing for penalties of three times the amount of the fraud in addition to fines of $5,000 to $10,000 per violation. It is estimated that the United States has collected almost $8 billion in fines and penalties in False Claims Act cases since 1986.
The False Claims Act encourages whistleblowers that are aware of fraud being perpetrated against the Government to report and civilly prosecute those responsible for the unlawful actions against the United States. If the whistleblower’s case is either settled or a judgment is rendered against the offending defendant, the whistleblower is entitled to up to 30% of the Government’s recovery as a reward for coming forward. The False Claims Act also prohibits employers from retaliating against whistleblowers, and allows whistleblowers that are retaliated against to sue for their damages. Ultimately, whistleblowers save the United States money by recouping the fraudulent losses they report and by deterring future frauds against the Government.