The federal government spends billions of dollars on contracts, grants and programs every year. Unfortunately, fraud and abuse siphon off taxpayer funds and undermine the public’s trust. To combat fraud, the False Claims Act (FCA) allows private citizens to act as whistleblowers and file “qui tam” lawsuits on the government’s behalf.
Successful whistleblowers can recover a significant reward: between 15 % and 30 % of the government’s recovery. This article explains how qui tam actions work, who can file them, the rewards and risks involved, and the protections available under federal and Oregon law.
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What Is a Qui Tam Lawsuit?
The phrase qui tam comes from the Latin “qui tam pro domino rege quam pro se ipso,” meaning “who sues on behalf of the King as well as for himself.” Under the False Claims Act (31 U.S.C. §§ 3729–3733), a private person (called a relator) may file a lawsuit on behalf of the United States against individuals or companies that knowingly submit false claims for federal funds. Examples of fraud include:
- Billing for services not provided or overbilling under federal contracts.
- Defective products or services sold to the government.
- Fraudulent billing under Medicare, Medicaid, or other federal health‑care programs.
- False certifications to obtain loans, grants, or pandemic relief funds.
The Department of Justice (DOJ) notes that many fraud investigations arise from whistleblower reports, and the False Claims Act allows private citizens to file qui tam suits and share in the recovery. After a relator files a complaint under seal, the government investigates and decides whether to intervene and take over the case.
If the government intervenes and the suit succeeds, the whistleblower typically receives 15 % to 30 % of the amount recovered. If the government declines to intervene, the relator may proceed on their own and may be entitled to a higher reward if they prevail.
The Whistleblower Reward Structure
The FCA’s reward provisions incentivize insiders to expose fraud. According to DOJ data, qui tam cases are responsible for billions of dollars in recoveries each year. When the government recovers money through a settlement or trial, the relator’s reward depends on several factors:
- Extent of Contribution – The relator’s knowledge, assistance during the investigation, and quality of the information provided.
- Government Intervention – Cases in which the government intervenes typically result in higher total recoveries but a smaller percentage award (15 %–25 %). Cases where the relator litigates without government intervention may yield awards up to 30 %.
- Timing of Disclosure – Prompt reporting may result in a higher share. Relators may be disqualified if they delay reporting or if the information is already public.
- Relator’s Involvement – If the relator planned and initiated the fraud, their share may be reduced.
The potential reward can be substantial. In recent years, whistleblowers have received multimillion‑dollar awards for exposing pharmaceutical kickback schemes, defense contractor fraud, and misuse of pandemic relief funds. However, the process is complex and requires strict compliance with procedural rules.
Filing prematurely or publicly disclosing allegations before filing can bar recovery. Consultation with an experienced qui tam attorney is essential to maximize the chances of success and protection.
Protections Against Retaliation
Blowing the whistle on government fraud often requires employees to speak out against their own employers. Recognizing this risk, the False Claims Act contains robust anti‑retaliation provisions. Section 3730(h) of the FCA protects whistleblowers from being discharged, demoted, suspended, threatened, harassed, or otherwise discriminated against for lawful acts done in furtherance of a qui tam action.
Remedies can include reinstatement, double back pay, interest, and compensation for special damages such as emotional distress and attorney fees.
Oregon law provides additional protection. The Bureau of Labor and Industries (BOLI) states that it is illegal for employers to retaliate against employees who report unsafe or illegal activities or exercise rights under state or federal law. Employees who experience retaliation must file a complaint with BOLI within one year of the discriminatory act.
Oregon’s whistleblower statutes also protect public employees (ORS 659A.203) and private employees (ORS 659A.199) who report violations of law or significant public health or safety concerns to a supervisor, regulatory agency, or law enforcement.
Who Can File a Qui Tam Action?
Any individual with non‑public knowledge of fraud against the government can become a relator. This often includes current or former employees, contractors, competitors, or even concerned citizens.
To file successfully, the relator must be the original source of the information and must provide information that is not already publicly disclosed. Cases may be barred if the claims are based on publicly available information unless the relator is the original source. Common participants include:
- Insiders: Employees, consultants, or contractors who have direct knowledge of fraudulent billing or false certifications.
- Competitors: Businesses that discover a rival is defrauding the government may file a qui tam action.
- Health‑care professionals: Physicians or billing specialists who uncover Medicare or Medicaid fraud.
- State and local employees: Workers involved in state‑administered federal programs may have knowledge of fraud.
Some individuals are ineligible to file. Members of the armed services, current federal employees, or certain government officials may face restrictions. Additionally, individuals who intentionally participated in the fraud may have their awards reduced or denied.
How to File a Qui Tam Lawsuit
Filing a successful qui tam action requires careful planning and adherence to specific procedures. Relators who make mistakes can jeopardize their case and forfeit potential rewards. Here is an overview of the process:
- Gather Evidence – The relator should collect documents, emails, billing records, and other evidence that demonstrate the fraudulent conduct. Keep this evidence confidential and do not share it publicly. Whistleblowers should consult with a qualified attorney before taking any documents to ensure they do not violate privacy laws.
- Consult an Attorney – Retaining an experienced whistleblower attorney is crucial. An attorney will evaluate the claim, determine whether it meets the FCA’s requirements, and guide the relator through the process. Because qui tam actions are complex, the attorney may conduct additional research or subpoena records.
- File a Complaint Under Seal – The qui tam complaint must be filed in federal district court under seal. Filing under seal means the case is kept confidential and is not served on the defendant. The complaint remains sealed for at least 60 days while the government investigates. The relator must also provide a written disclosure statement and all material evidence to the Department of Justice.
- Government Investigation – During the seal period, the DOJ and relevant agencies investigate the allegations. They may request additional information from the relator or interview witnesses. The government can request extensions of the seal period if more time is needed.
- Government Decision – After investigating, the government will either intervene in the case or decline to intervene. If the government intervenes, it takes over prosecution of the case. If it declines, the relator can proceed on their own but must be prepared to litigate against well‑funded defendants.
- Litigation and Settlement – If the case moves forward, both sides engage in discovery and litigation. Many qui tam cases settle, with defendants agreeing to repay false claims and pay fines. If the case goes to trial and the relator wins, the court will determine the damages and award the relator their share.
Time Limits
Whistleblowers must file qui tam actions within six years of the violation or three years after the government discovers (or should have discovered) the fraud, but no more than ten years after the violation. Because these deadlines can be complicated, consulting an attorney early is essential.
Potential Risks and Challenges
While the rewards for successful qui tam actions can be significant, potential relators should consider the risks and challenges:
- Retaliation: Even with legal protections, whistleblowers may face retaliation from employers or colleagues. Document any retaliatory acts and report them immediately. The FCA and Oregon law provide remedies for retaliated whistleblowers, but the process can be stressful.
- Public Exposure: Although cases are initially filed under seal, once the case is unsealed, the relator’s identity will become public. Some whistleblowers choose anonymity; others may face media scrutiny.
- Complex Litigation: Qui tam cases involve complex legal issues, substantial evidence, and aggressive defense attorneys. Cases can take years to resolve. Hiring experienced counsel is critical.
- Financial Risk: Attorneys typically take qui tam cases on a contingency basis, meaning they only get paid if the case succeeds. However, relators may still face costs, especially if the government declines to intervene.
Tips for Whistleblowers
- Do Not Go Alone – Speak with an attorney before taking any action. Most qui tam lawyers offer confidential consultations.
- Do Not Publicly Disclose – Public disclosure of the fraud before filing can bar your claim. Refrain from discussing the case on social media or with coworkers.
- Understand Anti‑Retaliation Protections – Familiarize yourself with federal and state protections. If your employer retaliates, file a complaint with BOLI or the appropriate agency within the required timeframe.
- Be Patient – Qui tam cases can take years. The investigation and litigation process is lengthy; patience and cooperation with the government and your attorney are key.
Conclusion
Exposing fraud against the government is both courageous and complex. The False Claims Act empowers private citizens to hold wrongdoers accountable and offers substantial financial rewards, but navigating the process requires expertise and diligence.
If you believe you have information about fraud involving federal funds, consult a qualified qui tam attorney at Meyer Employment Law to evaluate your case and protect your rights.
Federal law and Oregon statutes protect whistleblowers from retaliation, but strict deadlines and procedural requirements mean that acting quickly is essential. By shining a light on fraud, whistleblowers help recover taxpayer dollars and promote integrity in government programs.
For more information on protecting your employment rights and reporting retaliation, visit our employment retaliation services page.
