Whistleblower lawsuits have been around for centuries. Their impact is still significant.
Another term for a whistleblower lawsuit is “qui tam,” and this form of legal action has actually been around for centuries. That certainly says something about mankind’s avarice and the drive to get money from the government in a fraudulent manner. Actually, the lawsuits of centuries ago were a way for citizens to shield their government from fraud. Over the passing years, things have obviously evolved and in America, the False Claims Act came into being to nip abuse in the bud that was being committed by defense contractors, health care providers and financial institutions.
Unfortunately, fraud is on the rise, given the sorry state of the economy. While this isn’t good news, it has made the federal government sit up and take notice of what is going on, finally realizing that they are and have been the victim of some significant fraudulent schemes that have netted others millions of dollars – ultimately at the taxpayer’s expense.
In self defense and also to stem the flood of dollars illegally making its way into the pockets of others, the government took action to protect tax dollars and to take control of the economy; trying to regulate it so it was not all over the map. Yes, there is such a thing as a free market, but those who were taking that phrase literally had to be stopped. This is where rules and regulatory powers must be brought into effect to keep the market a place to trade fairly and to keep it legitimate.
In the course of tracking how much money they had lost over the years, and the figures showed a staggering amount in the millions, the federal government brought in the Fraud Enforcement and Recovery Act (2009). It wasn’t much of a surprise that it passed with virtually no resistance or nay-saying. Shortly after that, the Fraud Enforcement and Recovery Act (FERA) also came into existence. The idea behind FERA was that, with enough pointed and clearly defined legal definitions (and money to support this), it could overhaul or reform fraud.
Under this legislation, budgets were boosted and made a great deal larger for those departments responsible for finding and prosecuting fraud. Sort of like putting their money where their mouth is; by decrying fraud and actively seeking to stop it, the only way the government could accomplish this was to increase the budget for enforcement departments and personnel. The departments that search for and act on fraud cases are the Securities and Exchange Commission, the Department of Housing and Urban Development and the Department of Justice.
Where the legal redefinition came into play was with the False Claims Act. It is noted to have a long history with the courts, but many of the definitions in it were out of sync with what Congress perceived was the intent of the law. This made it far less complex for whistleblowers to file suits and meant less of a need for as much evidence to prove a defendant was guilty of defrauding the federal government.
If you happen to be in a situation where you have knowledge and/or evidence of a company knowingly defrauding the federal government, speak to an experienced qui tam lawyer and find out how the law affects you today.