What Is A Qui Tam Lawsuit?

What is a Qui Tam lawsuit?

A Qui Tam lawsuit is a legal action filed by a private person against a defendant who defrauded the government out of money and violated the False Claims Act. A Qui Tam lawsuit has several unique features:

1. it is filed on behalf of the government (not by the government directly);
2. it remains a secret while the government investigates;
3. the person who filed the qui tam suit is protected by statute from retaliation;
4. the government can recover treble damages;
5. the government shares a portion of the money recovered with the person who filed the lawsuit.

“Qui Tam” is Latin for “who sues [on behalf of the Crown].”

Common types of Qui Tam lawsuits:

1. Healthcare Fraud

Healthcare fraud is one of the most common types of qui tam actions and involves fraudulent activities by healthcare providers and organizations.

Examples:

• Medicare/Medicaid Fraud: A healthcare provider bills Medicare for services that were never provided or for more expensive services than those actually rendered.
• Kickbacks: A pharmaceutical company offers kickbacks to doctors for prescribing certain medications that are then billed to Medicare or Medicaid.

2. Defense Contractor Fraud

This type involves fraud related to government defense contracts.

Examples:

• Overbilling: A defense contractor overcharges the Department of Defense for equipment or services.
• Substandard Products: A contractor supplies substandard or defective materials and equipment to the military, falsely certifying that they meet contract specifications.

3. Government Procurement Fraud

This involves fraud in the process of government contracting for goods and services.

Examples:

• Bid Rigging: Companies collude to rig the bidding process on government contracts, ensuring that a specific company wins at an inflated price.
• False Claims: A contractor submits false claims about the costs or progress of a project to receive payment from the government.

4. Grant Fraud

Fraud involving federal grants and research funds.

Examples:

• Misuse of Grant Funds: An organization uses grant money for unauthorized purposes, such as personal expenses.
• Falsified Research Data: A researcher submits false data in grant applications to secure funding.

5. Environmental Fraud

This type involves fraudulent activities related to environmental laws and regulations.

Examples:

• Illegal Dumping: A company illegally disposes of hazardous waste and falsifies records to the Environmental Protection Agency (EPA).
• Clean Energy Credits: A business falsely claims to produce renewable energy to qualify for government subsidies and tax credits.

6. Financial Fraud

Fraud involving financial institutions and activities regulated by the government.

Examples:

• TARP Fraud: Misuse of funds from the Troubled Asset Relief Program (TARP) intended to stabilize the banking system during financial crises.
• Mortgage Fraud: A lender submits false information to obtain government-backed mortgage guarantees.

7. Education Fraud

This involves fraud in educational institutions, particularly those receiving federal funds.

Examples:

• Federal Student Aid Fraud: A for-profit college submits false information about student enrollments or outcomes to receive federal student aid funds.
• Research Grant Fraud: Universities misuse federal research funds or falsify data in research grant applications.

8. Tax Fraud

Fraud related to tax filings and payments.

Examples:

• False Tax Returns: Individuals or corporations submit false tax returns to underreport income or inflate deductions.
• Offshore Tax Evasion: Entities hide income in offshore accounts to evade U.S. taxes.

9. Cybersecurity Fraud

Fraud involving misrepresentations about cybersecurity practices and compliance.

Examples:

• Data Breach Concealment: A company conceals data breaches and misrepresents its cybersecurity measures to maintain government contracts.
• Non-compliance with Standards: A contractor falsely certifies compliance with federal cybersecurity standards to secure contracts.

 

State Qui Tam Lawsuits

Several states have their own qui tam statutes, allowing whistleblowers to file lawsuits on behalf of the state to combat fraud against state government programs. Here is a list of states that have enacted their own False Claims Acts with qui tam provisions, with hyperlinks to the statutory texts:

1. California
   • California False Claims Act: Cal. Gov’t Code §§ 12650-12656
2. Colorado
   • Colorado Medicaid False Claims Act: Colo. Rev. Stat. §§ 25.5-4-303.5 to 25.5-4-310
3. Connecticut
   • Connecticut False Claims Act: Conn. Gen. Stat. §§ 4-274 to 4-289
4. Delaware
   • Delaware False Claims and Reporting Act: Del. Code Ann. tit. 6, §§ 1201-1211
5. District of Columbia
   • District of Columbia False Claims Act: D.C. Code §§ 2-381.01 to 2-381.09
6. Florida
   • Florida False Claims Act: Fla. Stat. §§ 68.081 to 68.092
7. Georgia
   • Georgia False Medicaid Claims Act: Ga. Code Ann. §§ 49-4-168 to 49-4-168.6
8. Hawaii
   • Hawaii False Claims Act: Haw. Rev. Stat. §§ 661-21 to 661-31
9. Illinois
   • Illinois False Claims Act: 740 Ill. Comp. Stat. 175/1 to 175/8
10. Indiana
    • Indiana False Claims and Whistleblower Protection Act: Ind. Code §§ 5-11-5.5-1 to 5-11-5.5-18
11. Iowa
    • Iowa False Claims Act: Iowa Code §§ 685.1 to 685.7
12. Louisiana
    • Louisiana Medical Assistance Programs Integrity Law: La. Rev. Stat. Ann. §§ 46:437.1 to 46:440.3
13. Maryland
    • Maryland False Claims Act: Md. Code Ann., Gen. Prov. §§ 8-101 to 8-111
14. Massachusetts
    • Massachusetts False Claims Act: Mass. Gen. Laws ch. 12, §§ 5A to 5O
15. Michigan
    • Michigan Medicaid False Claims Act: Mich. Comp. Laws §§ 400.601 to 400.615
16. Minnesota
    • Minnesota False Claims Act: Minn. Stat. §§ 15C.01 to 15C.16
17. Montana
    • Montana False Claims Act: Mont. Code Ann. §§ 17-8-401 to 17-8-413
18. Nevada
    • Nevada False Claims Act: Nev. Rev. Stat. §§ 357.010 to 357.250
19. New Hampshire
    • New Hampshire False Claims Act: N.H. Rev. Stat. Ann. §§ 167:58 to 167:61
20. New Jersey
    • New Jersey False Claims Act: N.J. Stat. Ann. §§ 2A:32C-1 to 2A:32C-18
21. New Mexico
    • New Mexico Fraud Against Taxpayers Act: N.M. Stat. Ann. §§ 44-9-1 to 44-9-14
22. New York
    • New York False Claims Act: N.Y. State Fin. Law §§ 187-194
23. North Carolina
    • North Carolina False Claims Act: N.C. Gen. Stat. §§ 1-605 to 1-618
24. Oklahoma
    • Oklahoma Medicaid False Claims Act: Okla. Stat. tit. 63, §§ 5053 to 5053.7
25. Rhode Island
    • Rhode Island False Claims Act: R.I. Gen. Laws §§ 9-1.1-1 to 9-1.1-9
26. Tennessee
    • Tennessee Medicaid False Claims Act: Tenn. Code Ann. §§ 71-5-181 to 71-5-185
27. Texas
    • Texas Medicaid Fraud Prevention Act: Tex. Hum. Res. Code Ann. §§ 36.001 to 36.132
28. Vermont
    • Vermont False Claims Act: Vt. Stat. Ann. tit. 32, §§ 630-649
29. Virginia
    • Virginia Fraud Against Taxpayers Act: Va. Code Ann. §§ 8.01-216.1 to 8.01-216.19
30. Washington
    • Washington Medicaid Fraud False Claims Act: Wash. Rev. Code §§ 74.66.005 to 74.66.130
31. Wisconsin
    • Wisconsin False Claims for Medical Assistance Act: Wis. Stat. §§ 20.931

These statutes allow for whistleblowers to bring forward information about fraud against state governments, often resulting in significant recoveries of lost funds and penalties for fraudulent parties.

 

Four Employees Who Prosecuted A Qui Tam Case Against Their Employer