What is Qui Tam?

What is qui tam law? Not everybody knows about this unique and powerful area of fraud reporting. Qui tam law allows the government the opportunity to recover up to treble damages in some areas of false claims. What is more, whistleblowers under qui tam law can collect percentages of successful settlements, incentivizing honesty and forthrightness.

Qui tam law is one of the most powerful areas of whistleblower protections, rewards, and fraud recovery in the United States today. Learn more about qui tam claims, their challenges, and how you might be able to qualify as a whistleblower with Tycko & Zavareei LLP.

Qui Tam Pronunciation

Qui tam is pronounced “kee tam”. Think of the hard “k” sound in the word “quiche,” instead of the softer “kw” sound in words like “quiet,” “quest,” or “query.”

What Does Qui Tam Mean?

Qui tam refers to part of a longer Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur.” This translates to “he who brings an action for the king as well as for himself.”

Like many areas of American law, qui tam law originates from British feudal law. A qui tam claim means a claim “in the name of the king.” The concept dates back to the British Middle Ages, when the king would offer rewards to citizens who reported crimes.

Qui Tam Provision of the False Claims Act

The False Claims Act is currently the most powerful American law enforcing qui tam claims and offering whistleblowers rewards for their disclosures. Under the qui tam provision of the False Claims Act, a whistleblower (in qui tam law, known as a “qui tam relator“) who can share information about fraud against the government may receive up to 30% of the government’s total reward from a successful case.

Importantly, the False Claims Act imposes treble damages on those who have made false claims to the federal government. Examples might include healthcare providers who try to claim inaccurate Medicare reimbursements, defense contractors who overbill for their work, small businesses who request federal aid through loans or grants to which they are not entitled, and more.

Because of the treble damages element of the False Claims Act, qui tam relators do not take any money away from the taxpayer by receiving part of the recovery. Instead, they help ensure that taxpayer money is being put to good use, and that those who rely on government services get the care that they deserve.

History of Qui Tam Law

Qui tam law in the United States originates in the 1800s during the Civil War. The False Claims Act was first known as the “Lincoln Law,” as it was signed by President Lincoln in response to rampant defense contractor fraud during the conflict. The Union Army reported receiving defective munitions, starved mules, and rotten food supplies from those who were selling to them. In response, the Lincoln Law aimed to make fraud against the federal government a crime.

The 1863 law has been amended several times throughout the years. In 1943, at the height of World War II, the law was severely weakened to reduce a guaranteed relator share from 50% of the recovery down to nothing at all. At most, 25% of a successful settlement could be shared with the relator. Additionally, cases had to be pursued solely through the federal government’s discretion, greatly impeding whistleblowers from following up on claims about fraud, waste, and abuse of funds.

By the 1980s, fraud against the federal government was at an all-time high. In 1985, the Pentagon announced that 9 out of 10 of its top contractors were under active criminal investigation for kickbacks, bribery, and collusion. Department of Justice estimates report that up to 10% of the total federal budget was defrauded in 1980, and that much of it was never recovered. Theft from the taxpayer was out of control across multiple areas of government, including the Department of Defense, Department of Health and Human Services, and others.

In response, the False Claims Act received an important series of amendments in 1986. Whistleblowers could now pursue a claim on their own through a qui tam law firm, whether or not the federal government agreed to investigate. A successful qui tam relator was once more guaranteed a portion of the recovery, and amounts were increased from 15 to 30% of the total settlement. Whistleblower protections were added against employer discrimination, in order to further encourage relators to come forward.

Finally, in 1986, up to treble damages were imposed upon those who violated the law. This step increased both total recoveries and whistleblower reward amounts, while disincentivizing future fraud efforts. Since these crucial amendments, the Department of Justice has recovered over $72 billion in defrauded taxpayer funds.

What is a Qui Tam Attorney?

A qui tam attorney is an expert in building qui tam claims, protecting their whistleblower clients, and prosecuting scam artists through qui tam litigation. A qui tam attorney specializes in filing qui tam lawsuits and fighting fraud. While the federal False Claims Act is the main law that usually applies to qui tam suits, there are other important statutes and recovery programs that a qui tam lawyer will be an expert in, such as:

What is a Qui Tam Action?

A qui tam action involves a claim of fraud or false reporting to the federal government. A qui tam action might also involve reverse false claims, or someone who has prevented the government from collecting what they are owed (such as an underpayment of taxes).

A qui tam action allows a private citizen to sue a company or individual on behalf of the United States government in order to recover money that was wrongfully obtained or is owed to the government. In a qui tam action, the relator or whistleblower brings the qui tam suit, but the government is the true plaintiff or wronged party.

Qui Tam Statute of Limitations

The qui tam statute of limitations is complicated, and for this reason as well as others it is important to work with an experienced qui tam attorney to bring your claim. Under Title 31, Section 3731(b) of the United States Code, “A civil action under section 3730 may not be brought – (1) more than 6 years after the date on which the violation of section 3729 is committed, or (2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.”

Essentially, when determining which limiting period applies to reporting a False Claims Act violation, the court will examine the time at which either the relator or the government official who should have known about the fraud discovered that it was taking place. Then they will apply whichever option occurs last as the latest possible time that the fraud can be reported.

Who Can Become a Qui Tam Whistleblower?

While the most common qui tam whistleblower are usually employees of a company engaged in wrongdoing, they do not have to be. A qui tam whistleblower can be anyone who has unique, previously undisclosed information about misreporting to the federal government, and/or the misuse of taxpayer funds.

Some common whistleblowers include former employees of companies that contract with the federal government; competitors in the field who have information about price fixing, bid rigging, or other attempts to reduce competition; friends or relatives of those committing fraud like insider trading or stock market manipulation; subcontractors with businesses; and more.

You do not have to work at a company in order to report fraud (although many do). You do not have to be entirely blameless in the crime. You also do not have to be a US citizen. Many of the most valuable whistleblowers when it comes to tax evasion, financial fraud, and bribes to foreign governments or officials are citizens of other countries who are still eligible for US-based rewards.

Filing a Qui Tam Lawsuit

When filing a qui tam lawsuit, your qui tam attorney will be able to ensure that you follow several crucial steps:

Gathering evidence: Not everything is admissible as proof in the court of law, and some documents or materials can cause trouble for a whistleblower to share. However, other kinds of documents, even medical records or certain materials subject to Non-Disclosure Agreements, are permissible to share when reporting violation of federal law. Consult with a qui tam attorney to ensure that the evidence you are able to provide is both legal for you to take, as well as part of the strongest possible case you can build.
Preparing your claim: Most initial reports involve both factual evidence as well as supporting legal arguments as to why the federal government should intervene in your fraud claim.
Filing your qui tam action: In a qui tam suit, you will first share your information with the federal agency responsible for investigating misappropriation of funds. Depending on the specifics of your claim, this can involve additional federal and state agencies besides the Department of Justice. Federal investigators will consider whether or not to take up your whistleblower claim depending on several factors, such as the strength of your evidence, the ability to prove wrongdoing, the reputable nature of your representation, and more.
Following up with investigators: Should the government choose to intervene, your cooperation is crucial to ensuring you receive the highest possible whistleblower reward from a successful case. Whistleblowers who cooperate fully with federal investigators and report early can recover a higher percentage than those who wait to report and fail to comply with the investigation.
Bringing the case to trial: If federal investigators do not choose to follow up on your claim, you have the option with the right qui tam lawyer to continue with the case on your own. If your claim is successful, you will automatically be awarded the highest possible percentage payout of 30% from the settlement.

What Happens after a Qui Tam Lawsuit is Filed?

After a qui tam lawsuit is filed, there is a waiting period of at least 60 days while the complaint is kept under seal. The company or individual that you have reported on will not be served or notified while federal investigators decide whether or not to follow up on the claim during this period.

The government may, at times, choose to extend this period with good reason. Extensions are not always granted and require proof of a serious inquiry and a “legitimate need for more time.”

What is the Reward of a Whistleblower in a Qui Tam Lawsuit?

For some whistleblowers, the truth is its own reward. However, becoming a whistleblower also has other benefits, including:

Monetary gain: Whistleblowers recover anywhere from 15 to 30% of a successful fraud claim. Because the False Claims Act imposes treble liability per violation, whistleblower rewards regularly reach into the hundreds of thousands or million dollar range.
Protections against retaliation: Once reported, whistleblowers are eligible for protection against retaliation from their employers. These protections can help you not only keep your employment, but also recover damages for any harassment, demotion, or other adverse effects you may suffer as a result of your disclosure.
Protecting the vulnerable: Many healthcare fraud cases involve harm done by nursing homes, addiction treatment centers, VA hospitals, and healthcare providers who are supposed to protect vulnerable populations. Likewise, Department of Defense fraud often puts service members in harm’s way by failing to provide them with appropriate gear or revealing sensitive information. Government contractor fraud can harm the environment and add risk to important infrastructure. Education fraud sinks many first-generation college students into debt for loans that they did not need, at for-profit colleges that do not provide real value. In short, government services provide vital resources to many members of our society, and defrauding the government is often stealing from them. Making false claims to the government is simply not a victimless crime.

Protections for Qui Tam Whistleblowers

Many whistleblowers hesitate to blow the whistle on fraud out of fear of being known as an informer and worries about retaliation. However, if whistleblowers under the False Claims Act are retaliated against, they have the option to sue for:

Reinstatement
Legal fees
Damages
Up to double back pay, plus interest, or front pay

Examples of covered retaliation include:

Harassment
Demotion
Failure to promote
Reduction of hours
Reduction of pay
Adverse changes to employment
Firing
Failure to rehire after a leave

Why is it Important to Work with a Qui Tam Lawyer?

It is important to work with a whistleblower lawyer for many reasons. The following are just some examples:

Being the first to report: Information must be previously undisclosed and unreported in order to qualify for a reward. Working with a qui tam lawyer as soon as possible protects your “first to file” interest, and creates an immediate paper trail for your claim.
Building your case: Qui tam claims with federal intervention receive on average higher payouts than those that proceed without it, based on the powerful discovery tools available to federal investigators. However, fewer than 25% of fraud claims filed receive intervention through the Department of Justice. Even if you know wrongdoing is taking place, you still need a reputable, experienced attorney by your side to present the strongest possible claim to the Department of Justice and any additional federal officials.
Protecting your recovery: In the event that your claim is denied by federal investigators, a qui tam lawyer will be able to represent your civil claim regardless in court, ensuring you still have the opportunity to recover up to 30% of the total settlement. Additionally, should the DOJ intervene, many fraud cases still take years before they see a final settlement. Working with a qui tam lawyer ensures that a professional is keeping their finger on the pulse of your disclosure, so that you can focus on your own priorities in the meantime.
Following filing guidelines: Qui tam law is a complex and specialized legal area. Often, qui tam claims cross state borders and involve federal and local liability. It is important to work with an attorney who specializes in qui tam law and who has a proven track record in the field in order to ensure your claim meets every deadline and qualifies for a reward through each filing requirement.
Protecting you against discrimination: If you face firing, demotion, suspension, or any kind of harassment as a whistleblower, you may be able to sue for up to double back pay as well as reinstatement. A whistleblower lawyer can protect not only your initial disclosure, but also your interests moving forward.

Challenges to Qui Tam Law

Qui tam law is an evolving field, just as scam artists and fraudsters constantly invent new ways to take advantage of the system. Some recent challenges to qui tam law include:

United States ex rel. Schutte v. SuperValu Inc., 143 S. Ct. 1391 (2023) (Thomas, J.)

Whistleblowers can take heart in good news from the Supreme Court in this 2023 decision. Schutte dismisses a key argument around the “scienter,” or “knowledge” portion of the False Claims Act. The False Claims Act determines that false claims must be made “knowingly,” or “with the requisite knowledge” that the claims were inaccurate.

The case hinged around two pharmaceutical companies, SuperValu and Safeway, that offered discounted prices to their customers while seeking reimbursement through Medicare and Medicaid for higher retail prices. Previously to Schutte, defendants in False Claims Act cases could argue that a reasonable determination could have been made that their claims were not false. For instance, in the Schutte case, the defendants attempted to argue that it would have been reasonable to assume that they were charging the correct prices to the federal government, as there was evidence to suggest that doing so was customary.

Instead, the Supreme Court swept away this challenge, affirming that for relators seeking to prove liability, it is more important to prove that the conduct was fraudulent, and that those engaged in it knew so—regardless of whether or not their actions could have been hypothetically considered reasonable.

United States ex rel. Polansky v. Exec. Health Res., Inc., 143 S. Ct. 1720 (2023) (Kagan, J.)

The broader effects of the 2023 Polansky decision from the Supreme Court remain to be seen in future qui tam cases. In Polansky, the Supreme Court held that the government has broad discretion to dismiss a relator’s case—even if they have declined to intervene in the case themselves during the 60 days of seal. The Supreme Court upheld the Third Circuit’s opinion that the government’s “request to dismiss the suit—based on its weighing of discovery burdens against likelihood of success—itself established good cause to intervene.”

While this decision may give some pause, one way to circumvent any concern caused by Polansky is to build the strongest possible case from the beginning by working with the best qui tam law firm available. When government investigators choose to intervene in a case, they rely on clearcut evidence of fraud, substantive legal arguments, and correctly filed documentation. Working with a reputable law firm with experience in qui tam claims is the best way to ensure that your case is taken seriously from the start.

Tycko & Zavareei LLP’s Qui Tam Cases

The qui tam attorneys at Tycko & Zavareei LLP have recovered more than $7 billion in our clients’ cases. Some notable settlements include:

Qui Tam Resources

The qui tam lawyers at Tycko & Zavareei LLP explain recent developments in qui tam law, answer frequently asked questions, and explain specific areas of whistleblower claims in our video series. Our attorneys are leaders in the fieldwho have dedicated years of practice to understanding the ins and outs of qui tam law and fighting fraud on the federal and state level.

Still Have Questions About Qui Tam Law? Call Our Qui Tam Attorneys

If you need help with a fraud claim against the federal government, contact the qui tam law firm of Tycko & Zavareei LLP today. We can guide you through every step of the qui tam process, from building your claim to protecting you against retaliation while ensuring you receive the maximum possible reward. More than 100 whistleblowers have entrusted our attorneys with their confidential disclosure. See why with a complimentary consultation about the facts of your case.