What Does "Qui Tam" Mean?

Qui tam is shortened from the Latin phrase, “qui tam pro domino rege quam pro se ipso in hac parte sequitur.” This roughly translates to “he who brings an action on behalf of the king as well as himself." Qui tam law originated in fourteenth century England, when the king would deputize citizens to report on instances of lawbreaking in exchange for a reward. The legal concept was incorporated into the False Claims Act under President Abraham Lincoln, and has been a key component of fraud recovery for the federal government ever since.

In 1863, the Union Army was struggling to get through a brutal winter during the Civil War. The troops were short on provisions, and were being sold rotten food, ragged clothing and lame mules as they attempted to sustain their military campaign. This was perhaps the first, but certainly not the last, instance of rampant defense contractor fraud in American history.

In response, President Lincoln passed the False Claims Act, which is still in effect today. This landmark qui tam law, also known as the "Lincoln Law" because of its origins, prohibits false claims from being made to the federal government. Qui tam relators, or whistleblowers, are both allowed and incentivized to report instances of fraud and false claims made to the federal government. When they do so, they may become eligible to receive a percentage of the government's total settlement when they can bring original information that leads to a recovery.

Qui Tam and the False Claims Act

The False Claims Act has been amended many times throughout history and today is the most powerful anti-fraud protection that taxpayers and whistleblowers have. The False Claims Act now imposes treble liability per instance of each individual false claim made to the federal government, as well as penalties linked to the rate of inflation. The False Claims Act (31 USC 3729) holds liable any person who:

• knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

• knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;

• conspires to commit a violation of the statute;

• has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property;

• is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;

• knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property; or

• knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.

To fully understand the statute, take the example of a doctor who submits a false claim for reimbursement for a patient with Medicare. Let's say that they bill Medicare for a more complicated visit than the patient actually needed. Perhaps they were seen for a short 15 minute telehealth consultation, and the doctor's office instead bills their Medicare for a full in-person visit. This example is an instance of healthcare fraud, which the Department of Justice estimates costs taxpayers around $100 billion each year.

However, a nurse at the doctor's office knows about this fraud, as likely she has been instructed to go along with it. Instead, she decides to report it. She has the option to become a whistleblower (a qui tam relator) and file anonymously through a qui tam law firm. Under the False Claims Act, through her actions, the doctor's office can be held liable for up to three times the Medicare program's loss, plus a penalty of up to $11,000 per each claim filed as adjusted upward for inflation. Whistleblowers are also eligible to receive anywhere from 15% to 30% of the overall recovery from the FCA resolution.

But what about the nurse? What if her identity comes to light? Can she be fired for speaking up? The False Claims Act also protects whistleblowers from employer retaliation. The same qui tam law firm that represented her in her initial claim can file a federal right of action should she be discriminated against, fired, harassed, demoted, receive a reduction of hours or pay, or see any other adverse changes to her state of employment because of her disclosure. If her case is successful she may receive up to double back pay from the time that she was let go, as well as reinstatement at her former seniority level and the possibility of being awarded additional damages and attorneys fees.

The False Claims Act protects whistleblowers every step of the way, like in the above example. It allows qualified whistleblowers (or relators) to share in the recovery and also protects them if they are discriminated against because of their honesty or for speaking up.

What Is the Difference Between a Qui Tam Lawsuit and a Whistleblower Lawsuit?

Not every whistleblower report is a qui tam claim. For instance, reporting on discrimination in the hiring process or OSHA violations is normally is not the same thing as reporting FCA liability or FCA violations because such reporting does not involve a government contract, grant or program (like Medicare) being defrauded. Because of this, many whistleblower actions do not have the associated benefits of an FCA qui tam action. Only FCA qui tam law allow whistleblowers the option to recover up to 30% of the government's total settlement from a successful case.

Do Other Laws Have Qui Tam Provisions?

Other states offer their own versions of the FCA qui tam provisions. These states qui tam laws may allow relators to recover more for defrauding a state funded contract, grant, or program (like Medicaid). Localized False Claims Acts are in place in:

• California

• Colorado

• Delaware

• Florida

• Georgia

• Hawaii

• Illinois

• Indiana

• Iowa

• Maryland

• Massachusetts

• Minnesota

• Montana

• Nevada

• New Jersey

• New Mexico

• New York

• North Carolina

• Puerto Rico

• Rhode Island

• Tennessee

• Vermont

• Virginia

• Washington, D.C.

Additionally, some states offer their own qui tam recovery options, but only for instances of health care fraud such as defrauding the state's Medicaid program. These states are:

• Connecticut

• Louisiana

• Michigan

• New Hampshire

• Oklahoma

• Texas

• Washington

What Other Laws Provide Financial Rewards to Whistleblowers?

There are other federal laws in place to financially reward whistleblowers for reporting fraud and provide employment protections from retaliation for whistleblowing. They include:

• The Dodd-Frank Act, which helps protect those who can blow the whistle on financial fraud through the SEC and CFTC Whistleblower Programs

• IRS Whistleblower Law

• Foreign Corrupt Practices Act, which prevents bribery between transnational actors

• The DOJ Bank Fraud WB Reward Program: The Financial Institutions Anti-Fraud Enforcement Act (FIAFEA) for FIRREA (The Financial Institutions Reform, Recovery, and Enforcement Act of 1989) violations

• Federal Reserve Whistleblower Program for violations of certain federal banking laws.

• The U.S. Treasury Department Anti-Money Laundering WB Reward Program: For Bank Secrecy Act violations & making illegally-gained proceeds ("dirty money“) appear legal ("clean“)

• The U.S. Department of Transportation/National Highway Traffic Safety Administration (NHTSA) WB Reward Program: Work for a car manufacturer? Financial incentives for reporting (1) unreported defects that pose an unreasonable risk, and (2) noncompliance with federal motor vehicle safety standards.

• California & Illinois Insurance Fraud Prevention Acts

What Makes a "Good" Qui Tam Case?

A qui tam case is more likely to succeed when:

• The whistleblower is an insider (either an employee or industry competitor), with insight as well as information about how the fraud has occurred. Some of the best whistleblowers are employees or former employees or competitors of private companies (government contractors, healthcare organizations, or other regulated companies) committing fraud.

• The information is previously unreported, including on social media and on the news.

• There is powerful evidence that the whistleblower has been able to take with them before federal investigators step in. This can include memos, emails, company reports, testimony, and more.

• The qui tam law firm is well-known and respected. This can provide more weight to a claim when submitting under seal to the U.S. Department of Justice.

• There is an ongoing pattern of fraud, or a series of illegal actions to investigate.

• The fraud is reported in a timely manner, before evidence has the chance to be destroyed and potential whistleblowers are fired or demoted.

How to Choose a Qui Tam Law Firm

Look for a law firm that specializes in False Claims Act qui tam claims, as cases can be complex and involve both federal and state statutes. Choose attorneys who formerly worked for the U.S. Department of Justice with a high level of education, as well as specialized training in FCA qui tam representation. Ideally, a qui tam law firm will have connections to anti-fraud professional organizations as well as connections to U.S. Department of Justice investigators. Your law firm will be in charge of not only ensuring your claim meets all legal requirements and submitted properly, but also that the Department of Justice will investigate your case.

FCA qui tam law requires those with a claim to be represented by a lawyer. Therefore, choosing the right attorney is the best way to ensure that your qui tam claim is given the attention it deserves.