False Claims Act settlement
Watch the video above to learn more about the False Claims Act. If you have a potential claim, please contact us at firstname.lastname@example.org.
Cohen Milstein’s Whistleblower / False Claims practice group represents individuals reporting fraud in actions under the federal and state False Claims Acts and other fraud reporting programs including the whistleblower programs of the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC). If you have information regarding potential fraud on the government or violations of federal tax, securities, or commodities laws, please contact us at email@example.com.
COVID-19 and Whistleblower Actions
With the recent enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the economic collapse caused by the coronavirus will be met with unprecedented levels of government fiscal intervention to restore and stabilize our nation’s ailing economy. Given its over two trillion dollar price tag, federal outlays under the CARES Act will require close oversight to ensure that public funds are used for their intended purpose and are not diverted by unscrupulous companies or individuals.
While the CARES Act establishes institutional oversight mechanisms, government officials and committees are not the only means at our collective disposal by which to protect the integrity of government spending programs. As lawyers who regularly represent whistleblowers reporting fraud against the government, we know well that every American has a role to play. Our laws embody the wisdom that ordinary Americans themselves are oftentimes best positioned to monitor and report on fraud.
In 2019, the Department of Justice recovered more than three billion dollars through False Claims Act enforcement. In keeping with recent history, the vast majority of that recovery came from cases that were initiated by whistleblowers. During the 21st century alone, whistleblowers proceeding under the False Claims Act have protected government expenditures made in response to financial crises, natural disasters, Medicare and Medicaid expansion, and a variety of other circumstances.
In the current crisis, many Americans are wondering what they can do to assist with our nation’s response. For those who learn of fraud on the government, the answer is clear: there is an important role to play in safeguarding public spending and helping government programs reach those in need. With decades of experience representing whistleblowers, we are here to assist.
Please review our “COVID-19 and Whistleblower Actions: Frequently Asked Questions” or contact us directly at firstname.lastname@example.org.
The False Claims Act Whistleblower Statute
There are a host of federal and state statutes (sometimes referred to as "qui tam" statutes) which provide financial incentives to private citizens (often referred to as "whistleblowers" or "relators") who report fraudulent acts that have been committed against the government. The primary federal statute is the False Claims Act (FCA), a law that dates back to 1863 and the Civil War. The FCA imposes triple damages and penalties against any business or person that commits fraud in connection with obtaining a payment from the federal government.
The types of fraud that can give rise to liability under the FCA are myriad. Healthcare fraud, defense contractor fraud and fraud in the context of educational loans or grants are just a few of the general categories of fraud that have given rise to successful FCA lawsuits filed by private citizens. In recent years, as headlines have shown, alleged FCA violations by drug manufacturers (for overcharging the government for drugs, and promoting the sale of prescription drugs for uses not approved by the Food and Drug Administration (FDA), for instance) and other Medicaid and Medicare healthcare providers have resulted in settlements exceeding well over $1 billion dollars. In the aftermath of the Financial Crisis, settlements of several large FCA cases against banks and mortgage lenders also have been announced. These cases include allegations of falsifying documents used to file Federal Housing Administration ("FHA") mortgage insurance claims, approving FHA mortgages that fail to meet federal guidelines, and illegally billing extra costs to U.S. veterans refinancing their homes through the Department of Veterans Affairs.
In addition to fraud arising in the context of Covid-19 and the CARES Act, the Department of Justice in recent months has evidenced a focus upon pursuing fraud in connection with Medicare and Medicaid payments to skilled nursing facilities, fraud in connection with the management of Medicare Advantage Organizations, fraud directed towards the Veterans Administration and fraud in connection with federal payments for the utilization of federally certified electronic health records systems.
Many states (29 at last count) and the District of Columbia, have their own False Claims Act statutes, most of which parallel the federal FCA. Lawsuits arising under the federal and state false claims act statutes are required to be filed "under seal," which means that only the whistleblower, his or her counsel, the court and the government will know it has been filed. This provides the government an opportunity to investigate the claims on its own, while also providing anonymity to the whistleblower until the government reaches a decision as to whether it will pursue, or "intervene" in the case or not. The period of time during which the government conducts its investigation can last months or several years. If it chooses to intervene, the government takes over responsibility for litigating the case. Sometimes, however, the government looks to the whistleblower's counsel for assistance in the litigation, an opportunity which Cohen Milstein welcomes. Generally, with respect to both the federal and state statutes, whistleblowers can receive awards ranging from 15% to 30% of any amount recovered, plus attorney's fees and costs.
The IRS Whistleblower Program
The IRS whistleblower program, established in 2006, offers monetary rewards to individuals who provide "specific and credible" information to the IRS which results in the collection of at least $2 million in combined taxes, penalties, interest or other amounts from any noncompliant payer such as a corporation. Under Internal Revenue Code 7623(b), the IRS is authorized to request assistance from the whistleblower and his or her counsel to analyze the claim of nonpayment. The IRS generally must pay to the whistleblower 15% to 30% of the entire amount ultimately collected.
The SEC and CFTC Whistleblower Programs Under The Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), which became law in July 2010, gave the SEC Congressional authorization to provide monetary awards to eligible individuals who provide original information regarding securities laws violations (such as insider trading or fraud). Under the Dodd-Frank Act, this information must lead to an SEC enforcement action in which over $1 million in sanctions is ordered. The SEC Office of the Whistleblower was established to implement this program. Also under the Dodd-Frank Act, the CFTC must pay an award to eligible whistleblowers that provide the CFTC with original information about a violation of the Commodity Exchange Act that leads to a successful enforcement action resulting in sanctions exceeding $1 million. The range of awards is from 10% to 30% of the monies collected for whistleblowers who submit information regarding fraud to the SEC or, the CFTC.
The Motor Vehicle Safety Whistleblower Program
In December of 2015, President Obama signed the Fixing America’s Surface Transportation Act that established a Motor Vehicle Safety Whistleblower Program at the Department of Transportation. This program is modeled after the SEC and IRS whistleblower programs, and provides monetary rewards to individuals employed within the motor vehicle manufacturing or sales industries who voluntarily provide original information about life-threatening safety issues to the Department that results in monetary recovery. Whistleblowers are entitled to rewards of 10-30% of any such recovery.
Our Experience and Approach
We have decades of combined experience successfully pursuing whistleblower cases under the federal and state false claims act statutes in the healthcare, pharmaceutical, financial services, and defense contracting sectors, as well as in a variety of other industries that transact business with the government. We are well versed in pursuing IRS tax fraud claims, SEC and CFTC fraud claims under the Dodd-Frank Act, and Department of Transportation fraud claims under the Motor Vehicle Safety Whistleblower Program.
We are experienced in understanding how to pursue your case most effectively from the first interview, through the preparation of the complaint and submission of supporting documentation, to the presentation of your case to the government, to litigating your case to a successful conclusion. We have developed close, productive relationships with attorneys representing the United States government as well as state attorneys general offices. Equally important, we recognize that critical to assembling the most compelling case possible is developing a close, productive relationship with the whistleblower, one in which there is an open and full exchange of information and ideas and where our client knows he or she is part of our team. To that end, we make it a top priority to be accessible and responsive to our clients. Ultimately, we do all we can to make the experience of serving as a whistleblower a positive and rewarding one.
If you are interested in discussing a potential fraud on the government or a violation of federal tax, securities, or commodities law, please contact us at email@example.com.