An individual who blows the whistle on fraud on the state including misuse of state funds is eligible for a reward under the Virginia Fraud Against Taxpayers Act (VFATA), Va. Code § 8.01-216.1 et seq. VFATA prohibits fraud on the state government and provides for whistleblower rewards for those who uncover such waste of taxpayer funds. The VFATA closely mirrors the federal False Claims Act.

The VFATA imposes civil liability on anyone who:

• Knowingly makes a false or fraudulent claim for payment or approval to the state;

• Knowingly makes or uses a false record or statement relating to a false or fraudulent claim made to the state;

• Has possession or control of property or money used or to be used by the state and knowingly delivers less than the entire amount;

• Makes or delivers a receipt of property used or to be used by the state and, with intent to defraud does so without knowing all information on the receipt is true;

• Knowingly buys or receives public property as a pledge of obligation or debt from an officer or employee of the state who does not have the authority to transfer the property;

• Knowingly makes or uses a false record or statement relating to an obligation to pay or transfer funds or property to the state or conceals or avoids such obligation; and/or

• Conspires to commit any of the above violations.

A defendant found in violation of VFATA must pay the state a fine of between approximately $11,000 and $22,000. This amount increases with inflation and automatically adjusts to be equal to the amount set by the federal False Claims Act. A violator must also pay treble damages, i.e., three times the amount of damages a court finds the state sustained because of the fraud and reasonable attorneys’ fees and costs. VA Code § 8.01-216.3(A).

What is the process for filing a claim on behalf of the state under VFATA?

An individual whistleblower who knows of fraud on the state may bring a civil action on behalf of herself and the state against the violating party. An individual who wishes to file an action under VFATA must serve a confidential complaint with all known evidence and supporting information on the state. The information cannot be served on the defendant until a court orders the parties to do so. The state has 120 days to choose to intervene or proceed with the claim. If the state chooses to proceed, the state files the action. If the state proceeds, the individual whistleblower may remain involved in the action, but the court may limit the individual’s involvement if either party shows her involvement would result in an undue burden, harassment, or other undue waste of time or resources. If the state decides not to intervene or proceed, the individual may bring the claim herself. No party other than the state may intervene in a case under the statute. Id. at § 8.01-216.5, 216.6.

What monetary payment can a whistleblower obtain under VFATA?

If the state proceeds with an action brought by a whistleblower under the statute and prevails, the whistleblower will receive between 15 and 25 percent of the amount awarded to the state at the close of litigation or that amount of a settlement, plus reasonable expenses and attorneys’ fees and costs. The amount the whistleblower receives depends on how much she substantially contributed to the resolution of the action.

If the state does not proceed but the whistleblower brings the claim and the court finds the defendant in violation, the whistleblower will receive between 25 and 35 percent of the award or settlement as well as reasonable attorneys’ fees and costs. Id. at § 8.01-216.7.

What is the statute of limitations to file a claim under VFATA?

The statute of limitations is usually six years from the date the violation occurred. However, in some cases, it is three years from the date when material facts became known or should have been known to a state official charged with acting on the claim or 10 years after the date of violation, whichever is shorter. Id. at § 8.01-216.9.

Does VFATA prohibit an employer from retaliating against a whistleblower for filing or assisting with an action under the statute?

Yes, an employee, contractor, or agent is entitled to make-whole relief if her employer retaliates against her for commencing or participating in an action under VFATA. Relief includes reinstatement, double back pay plus interest, and special damages including reasonable attorneys’ fees and costs. The prohibition on retaliation extends to where the employer is the state, and private and state employees alike may bring retaliation claims against their employers in a court with jurisdiction. The statute of limitations for a retaliation claim under the statute is three years. Id. at § 8.01-216.8.