The False Claims Act is perhaps the single most effective whistleblower law in the U.S. Sometimes referred to as the Qui Tam claim, the act allows any person who discovers fraud against the federal government to sue on behalf of the government to recover civil penalties and damages.

What Qui Tam means

Qui tam comes from the Latin phrase "Qui tam pro domino rege quam pro se ipso in hac parte sequitor,” which means "he who brings a case on behalf of the King, as well as for himself.” Qui tam dates back to 13th century English common law and was incorporated into the U.S. legal system by America's founding fathers. The law allows a private citizen, known as a ‘relator,' to sue on behalf of the federal government.

Since 1986 more than 4,000 qui tam suits have been filed and the government has recovered more than $6 billion. Whistleblower rewards total over $1.4 billion.

History of the False Claims Act

The False Claims Act statute being used today is also known as the Lincoln Law because it was passed in March, 1863 in response to massive fraud by large Union Army contractors during the Civil War. President Lincoln had urged congress to pass the False Claims Act because of unscrupulous suppliers who were defrauding the Army by selling them bug-infested food, inferior products, and rifle and ammunition boxes that contained only sawdust. The government needed some powerful legal ammunition of its own in order to fight back. Under the False Claims Act of 1863, defendants shown to have defrauded the government faced penalties of double the damages suffered by the government plus a $2,000 civil penalty per false claim. The qui tam relator received half of the recovered amount.

In 1986, the government amended the False Claims Act to make it easier for qui tam relators to file claims and increased the rewards for those who come forward to do that. Under the terms of the amended False Claims Act, if the government collects from the fraudulent contractor, the whistleblower can share in the proceeds. This may result in the relator receiving as much as 30 percent of the government's recovery.

What is covered under the False Claims Act

The False Claims Act prohibits "any person from knowingly presenting, or causing to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval.” The Act also prohibits a variety of related deceptive practices involving government funds and property.

The False Claims Act does not cover:
• Tax fraud
• Trust fraud
• Inheritance fraud
• Estate fraud

It's important to understand that generally, only the relator who is the first to file a lawsuit can be rewarded for reporting the fraud. Even if one person uncovers the fraud, someone else can file the lawsuit first and bar the first whistleblower from sharing in any recovery.

The following websites can provide additional information about the False Claims Act:
www.consumerlaw.com/false.html
www.corporatecrimereporter.com/fraudrep.pdf
www.whistleblowers.org/html/fca.htm