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The False Claims Act is intended to encourage people to come forward with information and assist the government in stopping Medicare fraud, defense contractor fraud and other kinds of fraud. Under the statute, individuals are awarded a percentage of the money the government recovers as a result of their successful whistleblower lawsuits.

President Lincoln wanted private citizens to blow the whistle.

The False Claims Act dates back to the Civil War when, in 1863, President Abraham Lincoln and the Congress enacted this law to combat defense procurement fraud in which unscrupulous defense contractors were billing the Union Army for dead mules, boots with soles that had glued on, rather than stitched (and were coming apart in the rain and mud), and gunpowder that had been salted down with sawdust.

President Abraham Lincoln knew the federal government lacked the “insider knowledge” needed to uncover sophisticated schemes of fraud against the federal treasury. As a result, Lincoln wanted a law that would reward insiders who came forward with their private attorneys to disclose the fraud and prosecute it. This reward is called the “qui tam” provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery. “Qui tam” comes from the Latin phrase, “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which means “he who comes for the king as well as for himself.” So, in a “qui tam” lawsuit under the False Claims Act, private citizens sue for themselves and on behalf of the federal government.

The Qui Tam reward

The qui tam reward for the whistleblower ranges from 15% to 30%, depending on the extent to which the whistleblower (also known as the “relator”) and his counsel contribute to the prosecution of the case. In addition, the False Claims Act provides for the recovery of attorney fees and expenses. These two provisions combine to encourage whistleblowers to come forward, and private law firms to commit their resources, in fighting on the Government's behalf.

As one would expect, cases that settle before trial typically do so for less than the maximum treble damages and penalties amount. Additionally, if the Justice Department decides not to join your case, the value of your case and chances for success are greatly diminished. However, the more your counsel works with the Department of Justice in their investigation and “carries the load” to prosecute the case can make a substantial difference in both the amount of the total recovery and in the determination of whether you receive the lower end of a 15% share or receive toward the upper end of the 25% maximum where the government has joined in the prosecution.

For examples of some of the settlements and results involving the attorneys of WARREN | BENSON LAW GROUP, see “National Results.”