What Is the False Claims Act, and How Does It Protect Whistleblowers?

Government programs rely on accurate billing and honest reporting to make sure taxpayer money reaches the people and services it is meant to support. When a company or individual knowingly submits false claims for government funds, that conduct can lead to serious legal consequences. Employees and other people who discover this type of misconduct may have an important role in bringing it to light.

The federal False Claims Act provides a way to hold businesses and individuals accountable for certain types of fraud involving government money. It also allows qualifying whistleblowers to bring lawsuits on the government’s behalf and may protect them from workplace retaliation. For people in New York who suspect that an employer, healthcare provider, or government contractor is committing fraud, understanding how the law works can help them evaluate their options.

What Is the False Claims Act?

The federal False Claims Act is a law designed to combat fraud against the United States government. It allows the government to pursue individuals and businesses that knowingly submit false claims for payment or take certain other actions involving fraudulent claims and government funds.

Examples of conduct that may violate the law include:

• Billing Medicare or Medicaid for medical services that were never provided.
• Knowingly submitting false invoices under a government contract.
• Falsifying records to obtain government payments.
• Misrepresenting compliance with requirements that affect a government payment.
• Knowingly concealing or improperly avoiding an obligation to repay money owed to the government.

Not every billing error, accounting mistake, or contract disagreement amounts to fraud. The False Claims Act generally requires knowing misconduct, which can include actual knowledge, deliberate ignorance, or reckless disregard for the truth. A person does not necessarily have to admit that they intended to commit fraud for the law to apply.

The purpose of the law is to help recover public funds lost through fraud and discourage businesses and individuals from knowingly taking money they are not entitled to receive.

Who Can Become a False Claims Act Whistleblower?

A whistleblower is someone who reports suspected wrongdoing. Under the False Claims Act, a qualifying private individual can take an additional step by filing a lawsuit on behalf of the government. These cases are known as qui tam lawsuits.

People who may discover potential fraud include healthcare employees, billing specialists, accountants, government contractors, compliance professionals, and others who encounter questionable practices through their work.

For example, an employee at a medical provider might discover that the company repeatedly bills a government healthcare program for treatments that patients never received. Rather than treating the issue as an ordinary billing mistake, the employee may uncover records suggesting that the practice was deliberate and ongoing.

The employee may have information relevant to a False Claims Act case. However, simply suspecting wrongdoing does not automatically qualify someone to bring a successful lawsuit or receive a financial award. The nature of the conduct, the available evidence, and the law’s filing requirements all matter.

How Does a Qui Tam Lawsuit Work?

A qui tam lawsuit allows a private person, known as a relator, to bring a claim on the government’s behalf. The process follows specific rules designed to give government authorities an opportunity to investigate the allegations.

In a typical federal case, the process involves several steps:

1. Reviewing the evidence: The whistleblower and their attorney evaluate the suspected fraud and the information available to support the allegations.
2. Filing under seal: The lawsuit is filed confidentially in federal court under rules that generally keep it sealed while the government investigates.
3. Government investigation: The Department of Justice reviews the allegations and decides whether to intervene and take over the case.
4. Moving the case forward: If the government intervenes, it generally leads the litigation. If it declines, the whistleblower may be able to continue the case independently, subject to the applicable rules.
5. Resolving the allegations: The case may end in a settlement, judgment, or another outcome. Any financial recovery and whistleblower award depend on the circumstances and applicable law.

The seal does not guarantee permanent anonymity. A case may become public as the proceedings continue, and confidentiality rules can be complex. Anyone considering this route should understand the process before taking steps that could affect an investigation or reveal sensitive information.

Can Whistleblowers Receive Financial Rewards?

Yes. The False Claims Act may allow a qualifying whistleblower to receive a portion of the money recovered by the government.

Under the federal statute, a whistleblower’s share generally ranges from 15% to 25% of the proceeds when the government intervenes and from 25% to 30% when it does not, subject to statutory requirements and court determinations. The final amount depends on the facts, the whistleblower’s contribution, and other legal considerations.

An award is not guaranteed. The allegations must support a qualifying case, and a recovery must occur before a share of that recovery can be distributed. Rules governing eligibility, prior public disclosures, and the source of the information may also affect whether someone can receive an award.

The potential reward is intended to encourage people with meaningful information about government fraud to come forward. It should not be treated as a guaranteed payment for reporting a concern.

Does the False Claims Act Protect Whistleblowers From Retaliation?

Reporting suspected fraud can create concerns about job security. Employees may worry that their employer will fire them, reduce their hours, deny a promotion, or otherwise punish them for raising questions about company practices.

The federal False Claims Act includes an anti-retaliation provision. It can protect employees, contractors, and agents who take qualifying lawful steps to investigate, report, or help stop conduct that may violate the law.

Depending on the circumstances, a person who experiences unlawful retaliation may be able to seek remedies such as reinstatement, back pay, and other relief authorized by the statute.

These protections are not automatic in every workplace dispute. The person’s actions, the employer’s response, and the connection between the protected activity and the adverse treatment all matter. Other whistleblower laws may also apply, depending on the industry and the type of misconduct involved.

If you believe your employer is retaliating against you, preserve relevant communications and employment records when lawful to do so. Consider speaking with an attorney before confronting the employer or taking other steps that could affect your rights.

How Does the New York False Claims Act Apply?

New York has its own False Claims Act, which addresses certain fraudulent claims involving state and local government funds. New York City also has a separate law covering qualifying fraudulent claims submitted to the city.

These laws can be relevant when suspected fraud involves New York’s Medicaid program, state-funded services, local government contracts, or other public funds. In some situations, conduct may raise questions under both federal and state law.

The laws are not identical in every respect. Their coverage, filing procedures, deadlines, and rules for whistleblower awards may differ. A claim involving federal funds may require a different approach from one involving only state or city funds.

For someone working in New York, identifying which government program lost money and which law may apply is an important part of evaluating a potential claim.

What Should You Do if You Discover Possible Government Fraud?

If you discover records or practices that appear to involve false government claims, avoid jumping to conclusions based on a single mistake or incomplete record. Preserve relevant information lawfully, document what you observed, and avoid altering documents or accessing records you are not authorized to obtain.

It is also important to be careful when discussing suspected fraud with coworkers or management. Depending on the situation, an attorney can help assess the evidence, explain the applicable reporting procedures, and determine whether a qui tam lawsuit or another legal option may be appropriate.

Timing matters because False Claims Act cases are subject to filing deadlines and procedural requirements. Acting without understanding those rules can affect a potential claim.

Alonso Krangle Fight for Your Whistleblower Rights

The False Claims Act gives the government tools to pursue certain types of fraud and provides a path for qualifying whistleblowers to help bring those cases forward. It may also offer financial awards and protections against retaliation, but eligibility depends on the facts and the applicable law. Alonso Krangle helps individuals understand legal issues that may arise when they discover suspected wrongdoing. If you believe an employer or organization is submitting fraudulent claims for government funds, Call 800-403-6191 or contact us online to discuss your situation and learn more about your rights.