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Melville, NY 11747

631.574.4454
Freiberger Haber LLP
708 3rd Avenue
New York, NY 10017

212.209.1005

What to Expect When Blowing The Whistle

The Complaint, The Disclosure Statement and The Decision Whether to Intervene

The False Claims Act provides that anyone who knowingly submits or causes to be submitted a false or fraudulent claim to the United States government is liable for triple damages and a civil penalty of $5,500 to $11,000 per violation.  The False Claims Act allows a private person, known as a “relator,” to bring a lawsuit on behalf of the government (called a “qui tam” action), when the person possesses information that a business or individual has defrauded the government.

Unlike the typical lawsuit filed in federal court, the False Claims Act provides a detailed process for the filing and pursuit of a qui tam action. Understanding this process requires an experienced attorney.  Freiberger Haber LLP has experience litigating qui tam actions and understands the process involved to pursue a claim under the False Claims Act.

To start a qui tam action, the relator must file a complaint under seal in federal court – i.e., it will be kept from public view. Copies of the complaint are served on the United States Department of Justice, including the local United States Attorney, and delivered to the judge assigned to the action. The complaint is not served on any of the named defendants until ordered by the court.

Additionally, the relator must serve a disclosure statement on the government containing substantially all the evidence in his/her possession about the allegations in the complaint. The disclosure statement is not filed in court, and is not available to the named defendants. The primary purpose of the disclosure statement is to provide the government with enough information to investigate the claim and determine whether to intervene in the action.

After the complaint is filed, the government has 60 days in which to investigate the claim. The court can extend this time upon a showing of “good cause.” Usually, the government will make numerous requests for an extension of the 60-day period.

The government’s investigation typically involves one or more law enforcement agencies (such as the Office of Inspector General of the victim agency, the Postal Inspection Service, or the FBI) and includes one or more interviews of the relator, review of the relator’s documents, interviews of witnesses, review of relevant government records, interviews of government officials and consultation with experts. The government can also serve a subpoena on the defendants to obtain and review documents and electronic records that are relevant to the relator’s claim.

Once the government concludes its investigation, it must decide whether to intervene, decline to intervene, move to dismiss, or try to settle the action. If the government intervenes, it controls the action and has the primary responsibility for prosecuting the case. Under these circumstances, the relator’s participation in the action may be limited. The government intervenes in only a small percentage of qui tam actions. If the government declines to intervene, the relator may continue to prosecute the action. However, the government may intervene at a later date upon a showing of good cause. The government typically declines to intervene if there is no merit to the case, or the action conflicts with the government’s statutory or policy interests.

Once the government decides whether to intervene, the court will unseal the complaint and the relator’s identity will be disclosed to the public, including the defendants.  Thereafter, the relator must serve his/her complaint upon each named defendant.

Statistics show that recoveries are higher in cases in which the government intervenes. The objective for the relator, therefore, is to persuade the government to intervene. Freiberger Haber LLP understands that the case must be packaged for the government before a qui tam action is filed. If you have knowledge of a possible violation of the False Claims Act, the firm will evaluate your claim and work with you to present a case, if appropriate, that can convince the government to intervene in the action.

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