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Employees May Profit from Disclosing Their Employer’s Fraud

The False Claims Act allows people who are employed by companies receiving federal benefits, such as grants, to file actions against their employer for defrauding the federal government. These claimants are informally known as “whistleblowers.” Persons filing under the Act stand to receive a portion (usually about 15-25 percent) of any recovered damages. The Act provides a legal tool to counteract fraudulent billings turned in to the federal government. Claims are most commonly filed by persons with insider knowledge of false claims involving health care, military, or other government spending programs.

There are some important hurdles to bringing such a claim. For example, if the fraud alleged in the complaint has been previously disclosed publicly, including through the media, the claimant must meet the definition of an “original source.” To be considered an “original source,” the claimant must have sufficient first-hand knowledge of the fraud that is independent of the public disclosures. In addition to the substantive knowledge requirement, the original source exception also has a procedural component-the relator must “voluntarily provide” the information underlying his complaint to the government prior to filing suit.

Once a relator brings suit on behalf of the government, the Department of Justice, in conjunction with a U.S. Attorney for the district in which the suit was filed, have the option to intervene in the suit. If the government does intervene, it will notify the company or person being sued that a claim has been filed. If the government does not decide to participate in the action, the claimant may proceed alone without the Department of Justice, though such cases historically have a much lower success rate. Claimants who do prevail in such cases may potentially receive a higher recovery, to a maximum of 30% of the total recovery.

If you believe your employer is defrauding the U.S. government, the experienced lawyers at the law firm of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner can assist with your claim. Call us today at 713-742-6007 or 888-228-8054 for your free consultation.

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