Qui tam: what activities are barred by the False Claims Act?

On Behalf of | Oct 8, 2021 | Whistleblower Law |

When an employee becomes aware of fraud being perpetrated by their employer, against a government entity, a qui tam action may be their best option. Qui tam gives private citizens the right to file suit on the government’s behalf and potentially collect a portion of any subsequent settlement or damages awarded. But how do you know if your employer’s activities are subject to a qui tam action?

The False Claims Act

Qui tam lawsuits are authorized in the False Claims Act, a federal statute directed at fraud committed against the government. Generally, the Act prohibits any person or entity from submitting false claims either to receive money or to avoid paying money. Not all false claims are protected by the Act, however; fraudulent claims involving taxes are handled by the Tax Code rather than the False Claims Act.

Knowledge of false claim

For a successful qui tam action, it is not enough that your employer submits a claim containing a falsehood. The employer must also be aware of the falsehood. Actual knowledge of the falsehood may be the most common means of committing fraud, but the employer is also in violation of the Act if they willfully ignore the truth or falsity of the information or recklessly disregard it.

Specific examples

Actions likely to violate the Act and give rise to qui tam include charging the government for more than was provided or attempting to acquire a government contract through fraud. Fraudulent applications for government loans or grants are also covered by the Act. And attempting to pay the government less than what is actually owed or falsely claiming that contractual obligations have been completed commonly run afoul of the Act.

Bringing a qui tam action is complex, requiring courage on the part of the employee and the assistance of an experienced legal professional. If you are considering doing so, get help and arm yourself with the knowledge required to do it properly.