BE A “QUI TAM” WHISTLEBLOWER-PLAINTIFF AND BE  REWARDED

By:   Roman P. Mosqueda, Esq.

            In a “Qui Tam” (abbreviation of the Latin phrase “Qui Tam pro domino rege quam pro se ipso,” meaning “He who sues on behalf of our Lord the King, as well  as for Himself”) litigation, a private-citizen whistleblower (or “relator”), who has knowledge of fraud against the United States Government, files a lawsuit on behalf of the Government, against the defendant(s), person(s), or business(es) that committed the fraud.

Federal False Claims Act:

A.  No Public Disclosure:

            The lawsuit is brought under the Federal False Claims Act (FCA), 31 U.S.C. Sections 3729-3733, by the “Qui Tam” plaintiff, through his or her privately-retained attorney(s), who is rewarded with a percentage of the recovery, if the action is successful, provided that the fraud has not previously been publicly disclosed, and regardless of whether he or she has direct or first-hand knowledge of the fraud.

            And even if the fraud has already been publicly disclosed, a private person may still file a “qui tam” action provided that he or she has direct knowledge of the fraud, independent of the previously and publicly disclosed information.

            Public disclosure of the fraud may take the form of print or broadcast in the news media, or of disclosure in another civil or criminal lawsuit, or in a Government Accounting Office report or hearing, not accessible to the general public.

B.  Requirements of Qui Tam Lawsuit:

            After the “Qui Tam” lawsuit is filed by the private-citizen plaintiff through his or her attorney(s), but before the defendant(s) who have committed the fraud is or are served with the summons and complaint, the plaintiff must serve the U.S. Department of Justice with “a copy of the complaint and written disclosure of substantially all material evidence and information (he or) she possesses,” pursuant to 31 U.S.C. Section 3730(b)(2).

            “The complaint shall be filed in camera, shall remain under seal for at least sixty (60) days, and shall not be served on the defendant(s) until the court so orders.  The Government may elect to intervene and proceed with the action within sixty (60) days after it receives both the complaint and the material evidence and information,” under continuation of 31 U.S.C. Section 3730(b)(2).

            “The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2).  Any such motions may be supported by affidavits or other submissions in camera,” pursuant to 31 U.S.C. Section 3730(b)(3).

            “The defendant shall not be required to respond to any complaint filed under this section until twenty (20) days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure,” under the continuation of 31 U.S.C Section 3730(b)(3).

            “Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall:  (a) proceed with the action, in which case the action shall be conducted by the Government; or (b) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action,” pursuant to 31 U.S.C. Section 3730(b)(4).

            “When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action,” under 31 U.S.C. Section 3730(b)(5).

C.  Award To Qui  Tam Plaintiff:

            Pursuant to 31 U.S.C. Section 3730(d)(1), “if the Government proceeds with an action brought by a (private) person…, such person shall receive at least fifteen percent (15%) but not more than twenty five percent (25%) of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.”

            But “if the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages.  The amount shall not be less than twenty five percent (25%) and not more than thirty percent (30%) of the proceeds of the action or settlement and shall be paid out of such proceeds.  Such person shall also receive an amount for reasonable expenses…, plus reasonable attorneys’ fees and costs... awarded against the defendant, pursuant to 31 U.S.C. Section 3730(d)(2).

D.  Statute of Limitations:

            31 U.S.C. Section 3731(b) states that “a civil action under Section 3730 may not be brought (1) more than six (6) years after the date on which the violation of Section 3729 (liability for false claims) is committed, or (2) more than three (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 ten (10) years after the date on which the violation is committed, whichever occurs last.”

E.  Penalty Provisions:

            Under Section 3729(a) of the Federal False Claims Act, the Government is entitled to three times the amount of its loss plus additional civil penalty of not less than $5,000.00 and not more than $10,000.00 for each false claim submitted and/or false document used to get a false claim approved for payment.

            It is noted that in the healthcare fraud area or in the Government contractor fraud area, for every 100 false claims submitted, the healthcare provider or Government contractor can face liability of  One Million Dollars ($1,000,000.00) or more in penalties alone, not counting the treble damages.

Reported “Qui Tam” Suit On Medicare Fraud:

            It was reported on the second week of October, 2006, that a San Diego-resident, Filipina registered nurse and owner of two (2) home healthcare facilities based in Los Angeles has paid the Federal Government the sum of $33.8 million in a whistleblower lawsuit for Medicare fraud brought by a payroll clerk as “Qui Tam” plaintiff. 

            The Federal Government reportedly intervened in the lawsuit filed in April 2003, and readied a settlement with the defendants registered nurse and her two (2) home health companies last year.

            As an award for being a “Qui Tam” plaintiff, the payroll clerk reportedly received  20.75 percent of the $33,872,626.03 recovery, or $7,028,568.90.

            Indeed, it is reported that in 1994 alone, False Claims Act litigation resulted in payment to “Qui Tam”  plaintiffs of $379 million.  And it is also reported that the total amount paid in settlement of the “Office Products” (for violations of the Federal Trade Agreements Act regarding office products made in China, and sold to U.S. Government) “Qui Tam” cases is over $27 million.

            So, a reward awaits a qualified whistleblower, “Qui Tam” plaintiff.

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            (The Author, Roman P. Mosqueda, has handled whistleblower and condemnation lawsuits in State and Federal Courts in California.  California has at least three (3) whistleblower statutes:  Government Code Sections 12650-12656, known as False Claims Act; Labor Code Sections 1101-1106; and Government Code Sections 8547-8547.12, known as California Whistleblower Protection Act.)