ATTORNEY NEWSLETTER
Four-Year Old $236 Million Settlement
Two Private Citizens Blew Whistle On Fraud
Appeals Court Holds Whistleblowers Entitled To Reward
Private citizens help the government recover billions of dollars every year in cases of fraud against the government. The cases are brought in federal courts throughout the country under the False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq. The private individuals bringing the cases are referred to as “relators,” and the cases themselves are called “qui tam” cases. If the government recovers, the individuals bringing the lawsuits are eligible for rewards. 31 U.S.C. § 3730(d). Most States have similar false claims statutes and other statutes designed to prohibit fraud particularly in the health care field. Much government fraud (at both the federal and State level), and the majority of the qui tam cases brought every year, relate to fraud in the healthcare field, under programs like Medicare and Medicaid (known as Medi-Cal in California). Relators of fraudulent conduct are often employees or managers, or former employees or managers, or (in healthcare cases) patients of the business engaging in the fraud. If you have credible information of fraud against the government in violation of the FCA in Los Angeles elsewhere in Southern California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Decision[1]
In 2019, a major US corporation paid $236 million to settle a qui tam case alleging Medicaid fraud. The government had alleged that the defendant had authorizes “vast numbers” of orthodontic procedures for children whose dental condition did not meet Medicaid standards for treatment. The company was accused of making false statements for payments under Medicaid. Ultimately, the defendant settled the allegations for $236 million. The State sought to deny the whistleblowers because it said they were not entitled to rewards under the State’s “first to file” rules regarding false claims cases. The whistleblowers (a dentist and other dental office employees) moved in Court for a whistleblower reward. The State opposed the motion on sovereign immunity grounds. The trial court rejected sovereign immunity as the appropriate mechanism for resolving such disputes. The appeals court affirmed the trial court’s denial of the State’s plea to jurisdiction, asserting that the State’s arguments regarding sovereign immunity and the first-to-file provision are insufficient to negate subject matter jurisdiction and maintaining that subject matter jurisdiction exists in the lower court to decide the merits of the whistleblowers’ claims to a reward.
How A Qui Tam Action Begins
Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. (State false claims acts operate essentially the same way in the relevant State court.) At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in Los Angeles or elsewhere in Southern California, 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.
