Articles Tagged with fraud

tim-mossholder-588403-unsplash-copy-300x200The partial shutdown of the federal government has been going on for almost five weeks as of the date of this article. Many government programs have been negatively impacted. This is especially pertinent regarding whistleblower (also known as qui tam) actions since the federal government is potentially involved in so many of the steps of prosecuting a successful lawsuit.  Furthermore, the lack of government funding that has resulted from the shutdown may also increase the potential for more fraudulent acts that are the impetus for qui tam actions in the first place.

Federal Courts

The status of the federal court system is important when considering federal qui tam actions. This is because the lawsuits are based on a federal law, the False Claims Act, wherein a whistleblower (known under the law as a relator) brings a lawsuit on behalf of the federal government in cases in which businesses have brought false claims to the government for payment. As such, these lawsuits are almost universally brought in the appropriate federal District Court. In the San Francisco area, the United States District Court for the Northern District of California is the most frequent venue for filing qui tam actions. Luckily, for relators, at least, on January 11, Chief Judge Hamilton issued an order providing for the continuation of operations under the Anti-Deficiency Act (see the Order here). Simply put, this means the Court will continue to accept filings, hear, and decide cases without interruption and handle new and existing cases as necessary. This means that, for the Court, at least, the business of justice will continue unimpeded.

rhema-kallianpur-275251-copy-300x200To encourage private citizens to come forward regarding fraud against the government, qui tam cases entitle the citizen, also called the relator, to a portion of any settlement or jury award that arises from his or her evidence and allegations. Individuals can bring qui tam cases under the federal False Claims Act when there is fraud against the federal government or can sue under a state-specific false claims act when the fraud is against the state. However, this award has sometimes led individuals to move forward qui tam suits for profit and not altruistic motives. There may be an even more profound issue when attorneys act as both the relator in a qui tam suit and their own lawyer.

Attorney-Relator Cannot Benefit Twice in Qui Tam Suit in Illinois

This issue came up in Illinois when an attorney brought hundreds of qui tam suits against retailer My Pillow Inc. for failing to collect and remit tax on products sold in Illinois. The attorney acted as both the relator in the suit as well as the attorney. This meant the attorney not only received a portion of the judgment against the company, but he also asked for attorney’s fees.