The Basics Of Qui Tam/Whistleblower Lawsuits

Federal False Claims Act Violations

Because keeping companies honest works from the inside as well as the outside, our office also represents and defends whistleblowers working for government contractors or affiliated companies. If you have information that could potentially reveal misconduct or government fraud on the part of your employer or contracted affiliate, you can file a qui tam lawsuit (also known as whistleblower lawsuits) in the name of the U.S. Government under the Federal False Claims Act.

What are Qui Tam Lawsuits (Whistleblower Lawsuits)?

Qui tam lawsuits – more commonly referred to as “whistleblower lawsuits” – are civil lawsuits that are filed under seal in the federal court designed to protect the United States Government from financial harm and fraud by third parties (usually medical laboratories, medical device and implant manufacturers, defense contractors, pharmaceutical companies, healthcare providers, university or other research facilities, and Federal grant recipients). Qui tam litigation dates back to the 1860s when it was enacted to protect troops from the dangers of inadequate military equipment used in the fight for freedom.

A person who desires to bring qui tam actions or whistleblower lawsuits must file the litigation “under seal” which allows the United States Government to investigate the claims for sixty days (unless extended) and make a determination if it will “intervene” in the case on behalf of the whistleblower. If the United States Government declines to “intervene” the whistleblower still has the option of going forward to pursue the qui tam action. In either case, proper legal representation is essential not only to see that the case is properly advanced and prosecuted but to also ensure you are fairly compensated for your efforts and information.

If I Disclose This Information How Am I Compensated?

As a whistleblower, you may be able to recover a monetary reward provided under the legislation of the Federal False Claims Act (31 USC 3729-3733) to compensate you in your effort in coming forward to disclose the information. You are essentially seeking to bring litigation against the individual or individuals who may be responsible for the harm caused to the United States Government on behalf of the United States of America.

Rewards for whistleblowers range from 15 to 25 percent of the recovery when the government intervenes and 25 to 30 percent if the government does not intervene. Having an attorney represent you in the matter will help ensure your efforts are properly documented and in turn help ensure the whistleblower receives proper compensation.

Should I Tell Others About the Fraud Or My Potential Lawsuit?

No. You must act quickly because your whistleblower case can be dismissed (and therefore no monetary recovery) if your information becomes known to third parties, the press, or if another whistleblower files suit before you. It is extremely important not to discuss the case with anyone except your attorney. It is important not to post information on any social media sites such as Twitter, Facebook, LinkedIn about the incident. Such disclosures could ultimately bar a whistleblower recovery.

How Does My Information Help?

As a whistleblower, you help to stop fraud that impacts the United States Government and your information ensures that the end users of products created by defense contractors – such as United States soldiers fighting overseas – are protected from harm. You also help ensure that funds contributing to the United States deficit are being used wisely and efficiently.

In addition to helping support the United States of America, whistleblowers also help to protect healthcare patients who may otherwise be negatively impacted by medical devices that do not meet approved strict federal specifications and guidelines. These strict criteria are set forth to ensure patient health and safety and ensure you, your family members, and others in healthcare facilities receive the highest form of health care products and services available to them.

What Are Some Common Types of Fraud in Different Industries that May Rise to Qui Tam Actions or Whistleblower Lawsuits?

Defense Contractors

  • Contractor fraud
  • Substitution of a cheaper or inferior product without government approval
  • Not meeting exact contract specifications
  • Violating the (TINA) Truth-in-Negotiation Act
  • Multiple charging

Banks & Financial Institutions

  • Keeping unclaimed bond proceeds rather than turning them over to the appropriate state entity. (a.k.a “Yield burning”)
  • Receiving federal bailout money under the “Capital Purchase Program” (CPP) or “Troubled Asset Recovery Program” (TARP) based on false or misleading representations or otherwise funds are not used as required under the program guidelines.
  • FHA Mortgages obtained through false information.
  • Misrepresentations involving municipal transactions including mispricing of securities purchased by public pension funds or local, state, or federal governments.
  • Falsely certifying municipal bonds as “tax exempt”.
  • Failing to comply with Treasury auction requirements.
  • Helping consumers commit tax fraud by assisting consumers in setting up sham trusts or illegal tax shelters.

Healthcare (Managed Care Organizations, Clinical Laboratories, Hospitals and Nursing Homes, Physicians, Home Health Agencies, Medical Equipment Suppliers, Medicare billing companies)

  • False claims submitted to Medicare and other government funded health programs
  • Manipulation of payments to Medicare by healthcare providers
  • Upcoding by healthcare providers or Medicare billing companies (a.k.a “Outlier” payments – increasing the severity of medical conditions to get higher reimbursements for “treatment”)
  • Bill padding by healthcare providers (Examples include billing for lab tests not medically necessary or billing for lab tests not ordered by approved physicians)
  • Billing the government for advertising under the guise of “community education”.
  • Billing the government for non-reimbursable costs
  • Kickbacks by healthcare facilities to get Medicare and Medicaid patients referred to their facility.
  • Healthcare providers billing Medicare for personal expenses or lobbying expenses.

Pharmaceutical Industry

  • Kickbacks by pharmaceutical companies to physicians and specialists issuing prescriptions.
  • Off-label marketing by pharmaceutical companies
  • Pharmaceutical companies providing free samples to physicians with knowledge physicians will bill Medicare and Medicaid for the samples.
  • “Best price” violations
  • Illegal sales and marketing programs
  • Selling products at discounted prices but concealing the price discount to avoid paying additional amounts to the government.
  • Pharmacies billing Medicaid full amount for partially filled prescriptions.
  • Billing Medicare for medically unnecessary psychiatric care for patients with dementia, or Alzheimer’s Disease.

Medical Laboratories

  • Bill padding by healthcare providers (Examples include billing for lab tests not medically necessary or billing for lab tests not ordered by approved physicians)
  • Kickbacks by blood testing companies to obtain blood testing contracts
  • Laboratories adding on tests not medically necessary or not requested by physicians.
  • Billing for lab tests not actually performed.
  • Laboratory kickbacks to physicians to obtain their business.
  • Billing Medicare for testing already paid for by other facilities.
  • Billing Medicare for bundled lab tests as free-standing tests resulting in increased costs to Medicare.

State Entities

  • Overcharging the federal government under any programs it receives a financial reimbursement including Medicaid and Social Security Act programs.

If you know of violations by any health care provider, defense contractor, pharmaceutical company, bank or financial institution, abuse regarding federal student loans such as Pell grants, PLUS loans, or Stafford loans, or fraud involving the federal government’s Welfare-to-Work (WTW), the Workforce Investment Act (WIA), or the Temporary Assistance to Needy Families (TANF) you should contact Attorney Craig Kalinoski at (570) 207-4000 without delay to begin the process necessary to see if your information is financially recoverable. You should act immediately since a whistleblower’s reward is often unavailable once the allegation is public, becomes known to the government, or is otherwise first reported by another individual.

Federal Securities Law Violations

Can I Receive a Financial Reward for Reporting Securities Violations?

Under the SEC and CFTC whistleblower rewards program (provided for under the Dodd-Frank Wall Street Reform and Protection Act) a whistleblower that reports securities law violations to Government regulators would be entitled to recover an award of up to 30% if the Government financially recovers more than $1 million dollars as a result of information provided to them by the whistleblower.

What Type of Information Can Result in a Financial Recovery?

Information form whistleblowers include information relating to insider trading, Ponzi schemes, and money laundering.

Can My Employers Discharge Me for a Whistleblowing?

The Dodd-Frank Wall Street Reform and Protection Act provides that employers may not retaliate against whistleblowers. Employees subjected to retaliation in any manner by their employer for whistleblower activities may sue their employer for reinstatement, back pay, and other damages.

Can I Remain Anonymous?

Under the Act, you can file anonymously through your attorney to protect your identity until it is time to receive your award.

If you know of federal security law violations or questionable business practices you should contact Attorney Craig Kalinoski at (570) 207-4000 without delay to begin the process necessary to see if your information is financially recoverable. You should act immediately since rewards are often reduced or unavailable if the allegations were previously disclosed or are otherwise made public.

We fight for the rights of our clients in a wide spectrum of practice areas, ranging from criminal defense to family law to civil rights and personal injury.

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