Qui tam, in plain terms

When the fraud you witnessed was on the government’s dime, the False Claims Act lets you bring the case in the government’s name — under seal, with a share of the recovery. Here is how that actually works, from someone who spent six years on the government’s side of it.

Most whistleblower situations are retaliation cases: you reported something, you paid for it, the law protects you. Qui tam is a different animal. It is not a case about what happened to you. It is the government’s fraud case, which the law deputizes you — the relator — to bring on its behalf, because you know what the government cannot see from outside. I spent six years at the Department of Justice reading these cases as they came in under seal. This primer is the orientation I wish every prospective relator had before filing.

1 · What counts as a false claim

The False Claims Act reaches knowingly false claims for government money and knowing schemes to avoid paying money owed to the government.¹ In practice: healthcare billing fraud — services not rendered, upcoding, medically unnecessary procedures, kickback-tainted claims; procurement and defense contract fraud — substituted parts, falsified testing; grant fraud; and the reverse cases, where a company falsifies its way out of an obligation. California’s parallel act covers the same conduct against state and local funds.² What the acts do not reach: garden-variety regulatory violations with no claim for payment attached, and tax — tax fraud has separate whistleblower programs with their own rules.

One refinement decides many cases: the falsehood must be material — the kind of thing that would actually matter to the government’s decision to pay.³ “The paperwork was imperfect” is not a case. “The certification they signed to get paid was a lie about the thing the program exists to buy” is.

2 · The mechanics — seal first, everything else second

A qui tam complaint is filed under seal, served not on the defendant but on the government, together with a disclosure statement laying out substantially all your evidence. The seal has a statutory life measured in weeks and a practical life measured in years, while the government investigates. Eventually it elects: intervene and take the case over, or decline and let you proceed with your own counsel. Relators recover a share either way — federally, fifteen to twenty-five percent when the government intervenes, up to thirty when it declines; California’s shares run higher.⁴ Declined does not mean doomed; some of the largest recoveries in the statute’s history were declined cases. But intervention changes everything about the road, which is why the disclosure statement — the document the government’s lawyers actually read — deserves to be written like it will be graded. It will be.

3 · Two race conditions you cannot un-lose

First to file. Only the first relator to file on a fraud gets to pursue it.⁵ If three billing managers at three hospitals have noticed the same scheme, the statute rewards the one whose complaint hits the docket first. This is the single best reason not to sit on what you know.

Public disclosure. Once the essential allegations are public — news coverage, government reports, other litigation — later-filed cases are barred unless the relator is an original source with independent, materially additive knowledge.⁶ Your value is what you know from inside that the world does not. It depreciates.

4 · The discipline of the seal

While the case is sealed you may not disclose its existence — not to coworkers, not on the internet, not to the defendant, not “hypothetically” to a friend in compliance. Seal violations have cost relators their share and, in bad cases, their suit. The rule of thumb we give clients is absolute: the case does not exist, to anyone, except in the room with your lawyers. It is the easiest instruction in this practice to state and, for people carrying something this heavy, the hardest to follow. Follow it.

5 · You are also protected personally

Alongside the government’s case, the statutes protect you: the FCA’s anti-retaliation provision provides reinstatement, double back pay, and fees for those punished for lawful acts in furtherance of an FCA case, and California’s whistleblower statute — with its favorable burden-shifting framework — runs in parallel.⁷ Retaliation claims are yours, not the government’s, and they do not go under seal. Coordinating the two tracks is a core part of the lawyering.

6 · What makes a strong relator

Specificity, documents, and position. The strong case names the mechanism: who billed which codes, for what, on whose instruction, and how the money flowed — supported by documents you possess lawfully through your job. (The usual caution has a wrinkle here: the law affords some latitude for evidence of the fraud itself, but the line is real and fact-specific — take nothing beyond what you already lawfully hold without advice.) If what you have is a strong suspicion and a title that put you in the room, that is worth a conversation. If what you have is specifics, bring them — and bring them before someone else does.

Write to us before you talk to anyone else about it. That is not marketing; with the first-to-file bar and the seal, it is the actual legal advice.

Notes

1. 31 U.S.C. §3729(a)(1).
2. Gov. Code §12650 et seq.
3. Universal Health Services, Inc. v. United States ex rel. Escobar (2016) 579 U.S. 176.
4. 31 U.S.C. §3730(d); Gov. Code §12652(g).
5. 31 U.S.C. §3730(b)(5).
6. 31 U.S.C. §3730(e)(4).
7. 31 U.S.C. §3730(h); Lab. Code §§1102.5, 1102.6.

Related writing: Four years of Lawson v. PPG · How California’s retaliation framework actually works

This article states California law as of its revision date and is analysis, not legal advice. Reading this site does not create an attorney-client relationship. Attorney advertising.