ATTORNEY NEWSLETTER
Former Employee Blows Whistle
Government Alleged Improper Billing For Consulting Contracts
Realtor Will Receive $70 Million Reward
The False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq., allows individuals and businesses with knowledge of fraud against the federal government to initiate actions on behalf of the government to recover government funds paid out as a result of fraudulent claims. 31 U.S.C. §3730(b). The private individuals or businesses, known as “relators,” brought the cases, referred to as “qui tam” cases,” under the FCA. If the government recovers, these individuals are eligible for rewards. 31 U.S.C. § 3730(d). Relators received over $488 million in rewards during Fiscal Year 2022; in one case alone a relator this year will receive a $70 million reward as discussed below. Relators of fraudulent conduct are often employees, or former employees, of the business engaging in the fraud. The submission of false information related to eligibility for government contracts is one significant source of government fraud, leading to improper billing as the reported case below illustrates. If you have credible information of government fraud in Los Angeles or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Consulting Firm Settles FCA Allegations For $377 Million
In a recent settlement announced by the U.S. Department of Justice,[1] a large consulting firm has agreed to pay $377 million to resolve allegations of FCA violations. The government alleges that the company improperly billed the government for consulting contracts. Government contracting rules stipulate that companies may only bill the government for direct or indirect costs that are connected to the overall objectives of their contract. Based on revelations made by a former employee, the government built its allegations that the company improperly allocated costs to the government that had no relationship to the underlying contracts. According to the allegations, between 2011 to 2021 the company charged the government for costs “that provided no benefit to the United States.” The $377 million settlement was among the largest contract fraud cases in United States history. According to U.S. Attorney Matthew Graves, the huge agreement “demonstrates that the United States will pursue even the largest companies and the most complex matters where taxpayer funds are alleged to have been pilfered.” Graves added that “the Justice Department is committed to ferreting out all fraud, waste, and abuse in government programs — small or large, simple or complex.”
“Government contractors must turn square corners when billing the government for costs under government contracts,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our commitment to hold accountable contractors that knowingly overcharge the government and enrich themselves at the expense of the American taxpayers.”
Fundamentals Of A Qui Tam Case
Qui tam cases begin with filing a complaint in the federal district court where the allegedly fraudulent conduct occurred. 31 U.S.C. § 3730(b). The complaint is filed under seal. The government has sixty days to review the allegations and decide whether to intervene. This review period can be extended. If the government decides to intervene, the government essentially takes over the litigation. 31 U.S.C. § 3730(c). If the government decides not to intervene, the relator has the right to continue the litigation on his or her own. If the relator continues the litigation alone, he or she receive a larger percentage of the amount the government eventually recovers. 31 U.S.C. § 3730(d). The relator may also pursue claims for wrongful retaliation against the defendant if the relator was fired or demoted as a result of blowing the whistle. 31 U.S.C. § 3730(h).
Contact Us
If you have credible information of government fraud call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
[1] Evans Law Firm, Inc. was not involved in the case in any way.
