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Qui Tam Whistleblower Claims Can Be Challenged

White Collar Criminal Defense By Harvey Binnall PLLC - 2018/11/30 at 07:14pm

The False Claims Act (FCA) criminalizes fraud, waste, abuse, and regulatory violations, and enacts provisions that protect whistleblowers from retaliation (and that give them an opportunity to bring a lawsuit against the violator).  Under the FCA, qui tam actions may be brought against wrongdoers on behalf of the government.  This can expose the purported wrongdoer to significant criminal liability.

If you’ve been sued pursuant to a qui tam action, the stakes are quite high.  Liability under the FCA can lead to penalties of up to three times the losses incurred by the government (as well as additional penalties for each violation).  As such, we encourage you to connect with an experienced Alexandria white collar defense attorney for further guidance on how to proceed with litigation.

For now, however, let’s take a closer look at qui tam actions and what they entail.

What is a Qui Tam Action?

Qui tam actions are civil lawsuits brought by a private citizen against a wrongdoer (i.e., an entity that has committed fraud, or is engaged in some other illegal activity covered by the FCA) on behalf of the government.  When a qui tam action is filed, the Department of Justice may investigate the allegations and determine whether to intervene.  In most cases, the Department of Justice chooses not to intervene — if the government chooses non-intervention, that does not necessarily mean that you’re “off the hook” for the violation.  The private plaintiff may pursue the qui tam action without the government in-tow, if they like.

Monetary Incentivization and Qui Tam Actions

Qui tam whistleblowers are incentivized to bring an action against the purported wrongdoer, as the lawsuit entitles the whistleblower to up to 30 percent of the total damages that the government would have recovered.  This is meant — in conjunction with the anti-retaliation provisions enshrined in the FCA — to encourage whistleblowers to come forward with information that might not otherwise be known to law enforcement authorities.

Though monetary incentivization is seen as necessary to encourage whistleblowers to come forward, it can also create a perverse incentive for those who may not actually have a satisfactory whistleblower argument against the business.  For example, the qui tam plaintiff may bring a lawsuit in the hopes that you will settle early and provide them some form of recovery that they would not otherwise have been eligible to receive.

Convincing the Government Not to Intervene

Fortunately, the government does not intervene in most qui tam actions.  When the government chooses non-intervention, this puts you — the defendant — in an advantageous position.  It may be significantly easier to win the civil qui tam lawsuit, or to negotiate a favorable settlement with the whistleblower (who can no longer count on the assistance and resources of the government).

Contact an Experienced Alexandria White Collar Defense Attorney for Assistance

Harvey & Binnall, PLLC is a boutique criminal defense and commercial litigation firm located in Alexandria, VA and serving clients throughout northern Virginia, Maryland, and the Washington D.C. metro area.  Our attorneys have extensive experience litigating qui tam whistleblower claims brought under the False Claims Act and understand the unique challenges typical of such disputes.

Given the high stakes nature of a qui tam whistleblower action and the consequences thereof, it’s important that you obtain comprehensive legal assistance.  We partner with clients from the very beginning of the litigation process and learn as much as we can about the particularities of your business (and the case itself).  This gives us valuable insight that can be used to persuade the government into non-intervention.

Call 703-888-1943 or request an appointment online to speak to an experienced Alexandria white collar defense attorney at Harvey & Binnall, PLLC.