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The False Claims Act Offers Incentives to Whistleblowers Who Expose Fraud against the Government

Federal False Claims Act (FCA) and the New York False Claims Act (NYFCA)

False Claims Act

In common parlance, a “whistleblower” is an employee who reports wrongdoing by his employer. Both the federal government and many state governments have enacted legislation that is designed to prevent an employer from retaliating against an employee (by dismissal, demotion, etc.) for “blowing the whistle” on inappropriate behavior by his employer.

The definition of “whistleblower” is somewhat broader under the Federal False Claims Act (FCA) and the New York False Claims Act (NYFCA). For the purposes of these acts, a whistleblower is a party who exposes fraud against the government in which an individual or a company obtains or withholds funds or property from the government through fraud. Private government contractors are typical defendants.

The Federal False Claims Act

The Federal False Claims Act allows anyone to file a lawsuit against either an individual or a company who defrauds the government out of money or property. Federal FCA lawsuits must be filed in a Federal District Court rather than a New York State Court (the United States District Court for the Northern District of New York, for example), and the Federal Rules of Civil Procedure apply.

A private citizen must file a “qui tam” lawsuit and comply with strict and complex procedural requirements. The incentive to do so arises from the fact that the citizen is entitled to keep a certain percentage of any funds that the government wins in such a lawsuit. If the case is strong, it is likely that the Department of Justice will take over the lawsuit at some point.

The New York False Claims Act

The New York False Claims Act (NYFCA) is a state version of the federal FCA that applies to fraud against the New York state government as well as the various local governments. Private citizens may also file claims under the NYFCA, and the New York Attorney General may take over the case.

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“You were so easy to work with and so encouraging, positive, and supportive. Always a gentleman – thank you!”

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Related Practice Areas

In addition to whistleblower defense claims, we frequently accept cases in the following practice areas, among others:

Frequently Asked Questions (FAQs)

What are some examples of fraud against the government that is actionable under the False Claims Act?

There are a virtually unlimited number of ways to profit by defrauding the government. Below are only a few examples:

  • Billing for goods or services not actually provided
  • Securing a contract by “rigging the bids” and then profiting from it
  • Using substandard contracting materials to save money and then falsely certifying otherwise

How much compensation does a whistleblower receive if an FCA lawsuit is successful?

The general compensation standards are as follows:

  • Federal FCA: 15 to 30 percent of the total amount recovered
  • NYCFA: 15 to 25 percent of the total amount recovered if the New York Attorney General intervenes in the lawsuit
  • NYFCA: 25 to 30 percent of the total amount recovered if the New York Attorney General does not intervene

Plaintiffs are eligible for these amounts whether the claim is resolved through judgment or through settlement.

What penalties are assessed against violators?

Under the federal FCA the penalties are:

  • a fine of $5,000 to $102,000 per violation; and
  • treble damages (300 percent of the government’s actual damages).

Under the NYFCA the penalties are:

  • a fine of $6,000 to $12,000 per violation; and
  • treble damages .

Are Employees Protected from Employer Retaliation?

Under both the federal and state FCA, an employee who suffers retaliation for “blowing the whistle” is eligible to receive (as necessary):

  • reinstatement or an injunction against continued discrimination;
  • double back pay; and
  • special damages (including attorney’s fees).

Serious Professionals with a Reputation to Protect

Here at E. Stewart Jones Hacker Murphy, we are used to being showered with honors. For example, our firm has been named a top-tier Albany law firm by U.S. News for many years in a row. Our team consists of attorneys who have received similar honors in their individual capacity:

  • Top rankings from preeminent legal ratings service AVVO
  • The highest possible quality ranking from the Martindale Hubbell
  • Membership in the International Academy of Trial Lawyers (only 500 members in the entire United States).

Time Is Your Adversary until You Act Decisively

It is important that you act quickly to protect yourself. If you do business in New York’s Capital Region and you are concerned about your company’s vulnerability to a whistleblower claim under either the federal or state version of the False Claims Act, contact us online or call one of our offices (in Albany, Saratoga, Troy, and Latham) to schedule a free case consultation.