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Whistleblower & Fraud Claims

Whistleblowers, Fraud, & the False Claims Act

Our law firm represents whistleblowers who report harmful and illegal activity that they witness at their place of work. Whistleblowers bring unethical actions to light that would otherwise go unnoticed. This article focuses on allegations of fraud, but we are interested in hearing from all sorts of whistleblowers, particularly in the healthcare industry.

If you want to sound the alarm on unethical activities, legal representation can offer you protection and can even help you get compensation for yourself and others. To discuss your False Claims Act case with our experienced lawyers at no charge, call us at (800) 553-8082 or go online.

What is the False Claims Act?

Few people know that there are federal and Maryland state laws known as “False Claims Acts” that allow private individuals to make their own claim for money damages when they report fraud that was committed against the federal or state government.

The False Claims Act is among the principal ways in which the government finds out and punishes those who have committed fraud against the state. It is a “qui tam” law, which means that people who are not a part of the government bring legal actions on behalf of the government. These people are called “relators” or “whistleblowers.” As a financial incentive, the plaintiff-relator in turn receives 15-30% of the damages that are recovered in the lawsuit and is also compensated for their legal fees and other expenses.

The people who committed the fraud have to pay the government a fine plus up to three times the value that they took. For reference, the US Department of Justice recovered over $3 billion from False Claims Act cases in 2019 alone.

Who can File Under the False Claims Act?

Any citizen can be a qui tam relator under the False Claims Act. They must, however, be the original source of information. Hearsay is not enough to file a claim. Typically, fraud is uncovered by employees while on-the-job.

When you accuse someone of fraud under the False Claims Act, you are initiating a civil action, not a criminal one. Only government prosecutors can bring a criminal action.

Does the Law Protect Whistleblowers?

Whistleblowers are protected from retaliation by their employers under both federal and Maryland law. Additionally, there are previsions that keep information under wraps while a government investigation is made. In the event that your employer retaliates anyway, good legal counsel can protect you.

The Federal False Claims Act

According to 31 U.S. Code § 3729. False claims, any person who commits fraud against the government is subject to a fine of $5,500-$11,000 for each false claim, plus three times the amount of damages that person caused to the United States government. Since there is a separate fee for each fraudulent bill, this amount can quickly add up.

False claims are defined as knowingly presenting a false or fraudulent claim for approval. It is likewise illegal to fail to deliver all the money in your possession or control that was to be used by the government. Buying public property from someone who is not authorized to sell it is also not allowed. The law also states that it is illegal to make a false record, statement, or receipt about government money, or to conspire to do any of these things.

The federal False Claims Act is over 150 years old. It was passed during the Civil War by President Lincoln due to unprecedented fraud against the Union army from private contractors. In 1986, Congress decided to amend the False Claims Act to include a qui tam provision in order to incentivize private citizens to report fraud.

Over time, the government increased the fine for each false claim from $2,000 to up to $11,000. The requirement that offenders must pay back double the damages was increased to triple the damages (treble damages).

Additionally, the reward for reporting false claims has increased to 15%-25% plus reasonable attorney's fees when the government intervenes, and 22% to 30% when the government chooses not to participate. The relator can object to the action if they choose, and the government must dismiss the action.

In 2009, the False Claims Act was amended again, this time expanding liability to false claims made to anyone, not just to the federal government. Originally, the law was limited to military and federal employees. This has been a game-changer for healthcare fraud.

The Maryland False Claims Act

The Maryland General Assembly passed the Maryland False Claims Act in April of 2010. The law focuses on health care. It is codified in § 2-601-611 of the Health and Mental Hygiene section of the Maryland Annotated Code.

Our statute is similar to the federal law in most respects. A difference is that if the Maryland government decides not to intervene, the case is dismissed. In the federal version of the law, a whistleblower can still pursue the action in court even if the government does not intervene.

The statute of limitations for any claim brought under this law is 6 years from the date of the violation or 3 years after the date when material facts were known or reasonably should have been known. In any case, the claim must be filed within 10 years after the date when the violation was committed.

Who are Typical Defendants in Whistleblower Cases?

Historically, those accused of fraud have been military and federal employees, government officials, and government contractors. In 2009, the law was amended, and anybody is now liable under the federal False Claims Act. In Maryland, an emphasis has been placed on nursing homes due to Medicare and Medicaid fraud. Improper payments from nursing homes are estimated to amount to billions of dollars a year. Pharmaceutical companies are another common defendant in qui tam suits.

Hiring a Lawyer

If you have a qui tam case or another whistleblower claim, you are seeking legal advice from an experienced, hardworking attorney. To discuss your potential whistleblower case, reach out to our whistleblower lawyers for a free, confidential consultation online or call us at (800) 553-8082. We primarily handle cases in the state of Maryland and the District of Columbia, though we handle strong cases from other states as well.

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