The False Claims Act was signed into law by President Abraham Lincoln during the Civil War. It was enacted so that the federal government had a means to sue unscrupulous merchants that sold substandard and defective goods to the Union Army. The False Claims Act has been amended several times since its enactment. The most significant amendments occurred in 1986 which allowed the government to seek treble damages for violations of the Act. The 1986 amendments also significantly increased the monetary incentives for whistleblowers.
The False Claims Act authorizes a private individual, known as a “relator,” to bring a cause of action on behalf of the United States government to recover monies lost due to fraud or related misconduct. A lawsuit filed under the False Claims Act is known as a qui tam action, a legal concept that first originated in England. If a relator is successful in a qui tam action, they are entitled receive a percentage of the recovered proceeds.
In Fiscal Year (FY) 2022, the Department of Justice (DOJ) recovered over $2.2 billion from 351 civil settlements and judgments in False Claims Act cases. Of the more than $2.2 billion recovered, over $1.9 billion came from lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act. Since the False Claims Act was amended in 1986, the government has recovered more than $72 billion.
Utilizing their collective experience in complex whistleblower litigation and trial work, YLG has developed expertise in complex class actions, particularly in the areas of healthcare fraud, securities fraud, anti-trust and employment litigation.
For example, in recent years, YLG has capitalized on its successful efforts in assisting the United States government to recover over $3 Billion Dollars in qui tam and whistleblower litigation by bringing the same types claims on behalf of individual litigants in the private sector. For example, YLG attorneys represent numerous employee benefit plans in nationwide class actions which seek to recover fraudulently obtained healthcare costs such as inflated prescription drug payments resulting from unlawful sales and marketing practices by several multi-national pharmaceutical drug companies.
A qui tam complaint filed under the False Claims Act typically remains under seal for at least a year, and oftentimes for two years or longer. During this period, the existence of the lawsuit and the identity of the whistleblower are both kept confidential. However, once a complaint is unsealed, the identity of the whistleblower is revealed. While courts have allowed whistleblowers to remain anonymous in limited circumstances, the identity of the whistleblower is revealed in the vast majority of False Claims Act cases.
A corporate executive who chooses to become a whistleblower can face apprehension and uncertainty about the future after their identity is eventually revealed. Although the False Claims Act and Sarbanes Oxley both contain anti-retaliation provisions, the reality is that many corporate whistleblowers no longer feel comfortable in a workplace environment where they are perceived as disloyal to the company.