Whistleblower and Qui Tam Lawsuits in Texas

What is a Whistleblower or Qui Tam Lawsuit?

A “whistleblower” or “qui tam” lawsuit is a legal action initiated by an individual, commonly referred to as the whistleblower, who has knowledge of fraud or wrongdoing committed against the government. The lawsuit is typically brought under the False Claims Act, 31 U.S.C. §§ 3729 – 3733, which allows private individuals to sue on behalf of the government and receive a percentage of any damages awarded.

Under the False Claims Act, whistleblowers have the ability to file “qui tam” lawsuits against individuals or companies who have defrauded the federal government. Private citizens who file a lawsuit are called qui tam relators, and they sue on behalf of the government and themselves. The relator files the lawsuit under seal, and the government has time to investigate the fraud allegations before deciding whether to join the case or decline to intervene. Whistleblowers are eligible to receive 15-30% of any amount that the government recuperates from the lawsuit. The law aims to incentivize people to report fraud and encourage law firms to litigate cases on the public’s behalf.

Difference between a whistleblower and qui tam lawsuit:

A whistleblower is an individual who reports illegal activity or wrongdoing within their organization or workplace. A qui tam case is a type of whistleblower case that specifically involves fraud against the government. Furthermore, qui tam lawsuits are brought under the False Claims Act, which rewards whistleblowers when the government is able to recover funds lost to fraud.

Who can be a whistleblower?

Anyone can be a whistleblower, regardless of their job title or position within the organization. Some examples of whistleblowers include employees who report financial fraud, safety violations, or discrimination in the workplace. Even government officials can be whistleblowers if they report corruption or abuse of power within their agency.

What is the legal process for a qui tam action?

The process of filing a whistleblower lawsuit typically involves the following steps:

  1. Gather Evidence: When a whistleblower suspects fraud or illegal activity, they need to gather evidence to support their claim.
  2. Hire Lawyer and File Lawsuit: After they have enough evidence, they can file a lawsuit under seal with the help of an experienced qui tam lawyer.
  3. Government Reviews Case: After the lawsuit is filed, the government has 60 days to decide whether or not to intervene in the case.  
    1. If the government chooses to intervene, the whistleblower will continue working with them.  
    2. If the government declines to intervene, the whistleblower can independently pursue the case; however, their chances of success may decrease.
  4. Outcome: If the case is successful, the defendant will be required to pay damages that are often several times the amount of money that was fraudulently gained. The whistleblower in these cases is entitled to a percentage of these damages, which can be quite substantial.  

What are the rewards for qui tam whistleblowers?

The award amount can vary depending on the extent of the whistleblower’s involvement and whether or not the government intervened. In cases where the government intervenes and the lawsuit results in a settlement or trial, the relator is entitled to receive 15-25% of the collected amounts. If the government does not intervene and the whistleblower’s case is successful, the reward increases to 25-30%.

Types of Qui Tam Lawsuits:

Qui tam lawsuits typically involve healthcare fraud and fraud by defense contractors.

Healthcare Fraud – The most common types of healthcare fraud are Medicare fraud, prescription drug fraud and false billing. Healthcare fraud whistleblowers can include employees, patients, and others who have firsthand knowledge of fraudulent activities. Examples of healthcare fraud include:

  • Medicare fraud – Medicare fraud occurs when healthcare providers bill the government for services that were not provided or were unnecessary. 
  • Prescription drug fraud – This includes overbilling insurance companies, mislabeling drugs, and selling fake or expired medications. Pharmaceutical companies are often accused of engaging in fraudulent practices such as off-label marketing, kickbacks, and overcharging for drugs.  
  • False billing – False billing occurs when healthcare providers bill for services that were not provided, unnecessary, or more expensive than necessary. Doctors, nurses, or entire hospitals can be responsible for this type of fraud.

Government Contract Fraud – Government contract fraud is when a company or individual intentionally submits false or fraudulent claims to the government in order to receive payment for goods or services. Common examples of government contract fraud include:

  • False certifications – This type of fraud occurs when a company lies about its qualifications to win a government contract. For example, a company may claim they have certain licenses or certifications that they don’t actually have.
  • Overbilling – Billing fraud happens when companies overcharge the government for products or services.
  • Kickbacks – Kickbacks happen when individuals receive payment or benefits in exchange for giving a contract to a particular company.

Legal Representation

Qui tam lawsuits are a great tool for fighting fraud and corruption, but they can also be complex and time-consuming. Anyone considering filing a qui tam lawsuit should consult with an experienced attorney to discuss their legal options.  

If you need to speak with an attorney regarding a potential qui tam action, please call us at 214-575-6060.