knightsmallWHISTLEBLOWER SUITS
THE FEDERAL FALSE CLAIMS ACT

There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government." Benjamin Franklin

HISTORY OF THE FEDERAL FALSE CLAIMS ACT

There is nothing novel in laws that allows the citizen to root out fraud against the taxpayers.

In 13th Century England the first such law was enacted allowing anyone with sufficient proof of fraud to bring a lawsuit to recover from the fraudster payments unwisely made by the Crown. As an incentive for those who had evidence of fraud the law made clear "he who sues for the King in this matter sues for himself as well" ("Qui Tam" in Latin).

Laws during Colonial times provided for the private prosecution of civil cases for fraud against the government. The laws were seen as a necessary deterrent to wrongdoing against the public at large. Even then, the government was known as being being an easy, fat target for fraud. Some states, but not Alaska, have laws that allow whistleblower cases for theft from the State government.

In the midst of the American Civil War contractor fraud was rampant. Deliveries of gun powder turned out to be sawdust. Army uniforms would melt away in the rain. Brand new rifles failed to fire. Markups on basic items like food could be higher than 1,000 percent.

The spectacle led President Abraham Lincoln to observe that the only limit to setting a price for the War Department was the personal shame, if any, of the war contractor.

The scope of the Federal False Claims Act just about matches the scope of the federal government in our lives. Possible FCA claims range from overcharging Medicare for health services to selling plainly inferior products to the Defense Department to billing the Government Services Administration for construction work never done to the diversion of federal stimulus funds from their intended purpose to cite but a few examples. Untold billions of stolen dollars have been restored to the taxpayer under this highly effective law. It is a booming business, yet just the tip of an iceberg. Official estimates state that up to 10% of federal payments made are induced somehow by fraud. Submitting a false claim is stealing from all of the citizens, conduct quite deserving of enhanced liability back to the government.

Lincoln

In 1863 Congress passed what was then known as "Lincoln's Law", the first enactment of the modern Federal False Claims Act. The law provides for fines, treble damages and attorney's fees against anyone who relies on falsity in its contracting with the government concerning the product or service being supplied. The citizen with the courage and energy to combat taxpayer fraud was allowed to keep as much as thirty percent of the recovery from the fraudster. Such suits now are often called whistleblower cases. The citizen bringing the suit is known under the law as the "relator", the person who related the critical proof of fraud.

MODERN ENFORCEMENT

The scope of the Federal False Claims Act just about matches the scope of the federal government in our lives. Possible FCA claims range from overcharging Medicare for health services to selling plainly inferior products to the Defense Department to billing the Government Services Administration for construction work never done to the diversion of federal stimulus funds from their intended purpose to cite but a few examples. Untold billions of stolen dollars have been restored to the taxpayer under this highly effective law. It is a booming business, yet just the tip of an iceberg. Official estimates state that up to 10% of federal payments made are induced somehow by fraud. Submitting a false claim is stealing from all of the citizens, conduct quite deserving of enhanced liability back to the government.

DO YOU HAVE INFORMATION THAT WOULD SUPPORT A TAXPAYER RECOVERY?

Whistleblowers are quite often the employee of a company that is cheating the government. It is the people who are in the workplaces where fraud occurs that have access to the proof of fraud. However, whistleblowers under the False Claims Act come from all walks of life. Sometimes, even federal employees detecting fraud become successful whistleblowers. The key to any case is possessing credible proof of fraud.

Just informing the federal government of the commission of fraud is not sufficient to qualify as a False Claims Act whistleblower. A lawsuit under seal must be filed in federal court. But that is not the only reason you need a lawyer. Whistleblowers need legal advice and experienced investigative help from the first step taken.

There have been few whistleblower suits brought in Alaska by citizens or by the government. That means the thieves and cheaters that are out there, big and small, have been largely getting away with it. It is past time they be held accountable for their acts.

Our firm offers free consultations to clients who believe they have evidence that would support a Federal False Claim Act suit. Mr. Merrill is a new member and cooperating attorney with Taxpayers Against Fraud and the National Whistleblowers' Center. Send us a confidential email . Whistleblowers are protected from retaliation under federal law.