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A Guide for a False Claims Act Whistleblower
Thursday, April 18, 2024

The federal False Claims Act is a favorite of whistleblowers because it provides broad workplace protections against retaliation and some of the most generous whistleblower rewards.

Whistleblower Cases Under the False Claims Act are for Government Program Fraud

While the False Claims Act, codified at 31 U.S.C. §§ 3729 et seq., is the law that most whistleblowers want to use, its application is limited to fraud committed on a government program, including the federal health care program. This limitation comes from the Act's initial purpose: the United States government passed the act during the Civil War in response to fraudsters who were billing the federal government for wartime assistance that they did not actually provide.

This limitation is important because it means that not all whistleblowers can utilize the Civil False Claims Act for their cases. The Act is only an option if a government program or source of funding is being defrauded. Some examples of these government programs are:

  • Medicare health care fraud
  • Medicaid health care fraud
  • The Paycheck Protection Program (PPP) that was enacted during the coronavirus
  • Federal grants or government contracts for goods or services, such as those struck with defense contractors

Misconduct, even if it is criminal, that does not implicate a government program cannot advance under the False Claims Act.

What to Expect in a Whistleblower Case Filed Under the False Claims Act

Whistleblower cases under the False Claims Act are confusing because they are unique in the legal world: A private citizen can urge federal law enforcement agents to take action against fraudulent activity or even stand in for the government and recover a share of the financial penalties levied against the fraudster.

However, just because they are unique does not mean that False Claims Act cases are complicated or difficult to understand. Cases that are filed under the False Claims Act take the same basic steps as those filed under any other whistleblower statute:

  • You first become aware of what appears to be a fraud perpetrated on federal health care programs
  • After investigating, your false and fraudulent claims suspicions are confirmed or at least strengthened
  • You decide to act as a false claim whistleblower
  • You hire a whistleblower law firm to help
  • With your legal team you continue to investigate, gathering evidence of fraud and building your case
  • Once you have a strong case, you and your legal team reach out to the appropriate federal law enforcement agency
  • A meeting is held, during which you and your attorneys disclose what you have found and urge the agency to intervene

If the agency intervenes, it will take over the investigation and prosecute the case. If the agency decides to sit the case out, you can still pursue the case by acting on the government’s behalf.

The False Claims Act’s Anti-Retaliation Provisions

Like most other whistleblower laws, the False Claims Act includes provisions that forbid workplace retaliation based on legal whistleblowing activities. The False Claims Act’s anti-retaliation provision, 31 U.S.C. § 3730(h), though, is slightly broader and more protective than those in other federal whistleblower laws.

Under the False Claims Act, unlawful workplace retaliation for health care providers includes:

  • Termination
  • Demotion
  • Suspension
  • Threatening conduct
  • Harassment
  • Other employment discrimination

Compare this with the Whistleblower Protection Act, another common federal law that whistleblowers use, which defines unlawful workplace retaliation as including:

  • Termination
  • Suspension 
  • Transfers or reassignments that are unwanted
  • Refusing to promote
  • Any negative changes to the terms of your employment

The False Claims Act’s explicit inclusion of threatening or harassing conduct in the workplace can be important.

Just because the False Claims Act prohibits retaliation for whistleblowing false or fraudulent claims, though, does not mean that your employer will not do it anyway. Many employers are extremely threatened by whistleblowers, as the information that they can bring to light can tarnish the company’s image and end an often lucrative scheme of fraud. In the majority of False Claims act violations, it is not uncommon for employers to fire a whistleblower, knowing that it will lead to a wrongful termination claim and more liability against the company. Many make this decision in the hopes that it will stop the whistleblower case from moving forward.

Suppose you are terminated or retaliated against for legally whistleblowing a false or fraudulent claim, including reverse false claims. In that case, you have legal recourse under the False Claims Act and can recover:

  • Back wages
  • A civil penalty equal to twice the amount of the back wages that you are owed
  • Interest on those back wages
  • Compensation for your other losses associated with the termination or retaliation, such as your emotional distress
  • The court costs and attorneys’ fees from filing the retaliation lawsuit
  • Reinstatement


The False Claims Act’s Generous Whistleblower Rewards

One reason why whistleblowers and their attorneys prefer to advance under the False Claims Act rather than other federal whistleblower legislation is that the False Claims Act provides more generous rewards for disclosing evidence of fraud.

Under the False Claims Act (31 U.S.C. § 3730(d)), depending on whether the government intervenes in the case or not, whistleblowers can recover:

  • 15 to 25 percent of the proceeds of the case if the government intervenes
  • 25 to 30 percent of the case’s proceeds if there is no government intervention

Where a whistleblower falls in that range of percentages will depend on “the extent to which the person substantially contributed” to the case.

In addition to this whistleblower reward, successful cases under the False Claims Act also recover the court costs and attorney’s fees incurred.

The “proceeds of the case” are the settlement or verdict amount. This is based on the amount that the government program was defrauded, plus a civil penalty of over $13,000 per violation, based on inflation. That amount is then tripled.

While it is not guaranteed that the proceeds of the case will recover the full amount—many cases under the False Claims Act settle for an amount far less than what is truly owed under the law—the fact that treble damages are imposed by the law can substantially inflate the whistleblower reward, making the False Claims Act an attractive option for people who have evidence of fraudulent conduct.

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