The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

    The federal False Claims Act (FCA) authorizes a private citizen with knowledge of fraudulent claims against the government to file suit on behalf of the government against the party who submitted the false claims.  A person who files an FCA law suit is referred to as the “relator” or more commonly as the “whistleblower.”  If the suit is successful, the whistleblower is entitled to share in the recovery, ranging from 10% to 30%.  The law currently provides for recoveries against wrongdoers of up to three times the government’s damages plus mandatory penalties ranging from $5,500 to $11,000 per claim.


    The FCA was enacted in 1863 during the height of the Civil War and was known as “Lincoln’s Law.”  It was designed to encourage private citizens to expose government contractors who knowingly provided the Union Army with defective or nonconforming goods or services.  The provision in the FCA that authorizes a whistleblower to share in the government’s recovery is known as the “Qui Tam” provision.  The term “Qui Tam” is an abbreviated version of the Latin phrase “Qui tam pro domino rege quam pro si ipso hac parte sequitur,” which translates as “Who sues on behalf of the King, as well as for Himself.”


    The FCA authorizes a whistleblower to file suit under seal in federal District Court against an individual or company that committed the fraud.  The Department of Justice then investigates the allegations and elects whether to prosecute the case itself or not to intervene in the matter.  If the government elects to prosecute the case and obtains a recovery, the whistleblower maintains the right to receive a share of the recovery.  If on the other hand the government does not intervene, the whistleblower may proceed with the case herself on behalf of the government.  If successful, the whistleblower’s share will generally be higher.

FCA cases can include any situation in which the federal government has been cheated by paying for goods or services that were not provided.  These generally involve Department of Defense contracting cases, Medicare and Medicaid payments to providers and suppliers, and any other situation where a party bills the government for goods or services that were not provided.  According to the Department of Justice, since 1986 when the FCA was strengthened, the government has recovered more than $20 billion.  In 2007, the government recovered $2 billion, of which $1.45 billion is associated with suits initiated by Qui Tam whistleblowers.  Recent recoveries in fiscal year 2007 include:


         $328 million from Bristol-Myers Squibb Company and its generic division, Apothecon, to resolve allegations involving illegal drug pricing and marketing activities;


         $311 million from four manufactures of hip and knee surgical implant products – Zimmer, Inc., Depuy Orthopaedics, Inc., Biomet Inc. and Smith & Nephew, Inc. – to settle claims that the companies improperly used consulting agreements and cash incentives with orthopedic surgeons to induce the purchase of their devices;


         $180 million from Aventis Pharmaceuticals, Inc. to resolve allegations that the company engaged in a scheme to inflate the price of its drug, Anzemet, knowing that the government established reimbursement rates based on those rates.  The whistleblowers shared a $33 million award.


         $105.3 million from Burlington Resources, Inc., a subsidiary of Conoco Phillips, to settle claims that Burlington underpaid royalties owed on natural gas produced under federal and Indian leases.


         $98.5 million from Oracle Corporation, in a record fraud settlement involving the General Services Administration to resolve allegations that PeopleSoft Inc., which Oracle acquired in 2005, provided the GSA with incomplete and inaccurate pricing disclosures for its software.  As a result of the defective disclosures, federal agencies that purchased PeopleSoft software and services under the company’s multiple award schedule with GSA paid inflated prices.  The whistleblower received an award of $17.7 million.


For more information on Whistleblower suits and the False Claims Act see the False Claims Act Legal Center at

Comments are closed.

Of Interest