Qui Tam and False Claims Act

If you know about fraud on Medicare, Medi-Cal, a government contract or another federal program, the False Claims Act may allow you to bring a case on the government’s behalf and share in the recovery. These are called qui tam cases, and they have strict rules about confidentiality and timing.

On this page: What is qui tam · Types of fraud · Relator’s share · How it works · Key rules · Retaliation · California law · FAQ

Smith Trial Group evaluates False Claims Act and qui tam matters for employees, executives and other insiders across Southern California. Attorney Cardon Smith spent years defending Fortune 500 companies in business litigation and served as a law clerk to a federal judge. Qui tam cases have strict procedural requirements, and we guide relators through each step, from the confidential evaluation and sealed filing through the government’s investigation and resolution. Consultations are free and confidential.

What Is a Qui Tam Case?

The federal False Claims Act (31 U.S.C. §§ 3729–3733) makes it illegal to knowingly submit, or cause someone else to submit, false or fraudulent claims for payment to the federal government, or to knowingly avoid paying money owed to it. Its qui tam provisions allow a private person with knowledge of the fraud, called a relator, to file a lawsuit on the government’s behalf. If the case succeeds, the relator receives a share of what the government recovers.

Companies that violate the False Claims Act can be liable for three times the government’s damages, plus a civil penalty for each false claim, currently more than $14,000 per claim and adjusted each year for inflation. Those amounts are why recoveries can be large.

Common Types of Fraud on the Government

• Health care fraud: billing Medicare, Medi-Cal or other federal programs for services not provided or not medically necessary, upcoding, and kickbacks for patient referrals
• Government contract fraud: overbilling, defective products or services, false certifications of compliance, and inflated pricing on federal contracts
• Grant and loan fraud: false statements to obtain federal grants, research funding or pandemic-era loans
• Customs fraud: misclassifying or undervaluing imports to avoid duties
• Cybersecurity and compliance fraud: falsely certifying compliance with security or regulatory requirements in government contracts

The Relator’s Share

• If the government intervenes and takes over the case, the relator generally receives 15 to 25 percent of the recovery.
• If the government declines and the relator pursues the case, the relator generally receives 25 to 30 percent.
• A successful relator can also recover reasonable attorney’s fees and costs from the defendant.

The share depends on factors such as the significance of the information and the relator’s contribution to the case.

How a Qui Tam Case Works

1. Confidential evaluation. We assess what you know, how you learned it, and whether the fraud has already been publicly disclosed.
2. Filing under seal. The complaint is filed in federal court under seal and served on the U.S. Department of Justice, not the defendant. The relator also gives the government a written disclosure of the evidence.
3. Government investigation. The seal lasts at least 60 days and is often extended for months or years while the government investigates. During this time, the case must stay confidential.
4. Intervention decision. The government decides whether to take over the case. If it declines, the relator may continue the case.
5. Resolution. Most successful cases resolve through settlement, and the relator’s share is paid from the government’s recovery.

Rules That Can Make or Break a Case

• First to file. Generally, once a qui tam case is filed, others cannot bring a related case based on the same facts. Speed matters.
• Public disclosure. If the fraud has already been publicly disclosed, for example in a news report or government audit, a case may be barred unless the relator is an original source of the information.
• Deadlines. Claims generally must be filed within six years of the violation, or within three years after the government knew or should have known the material facts, and no more than ten years after the violation.
• A lawyer is required. Courts generally do not allow relators to pursue qui tam cases without counsel.

Retaliation Protection

The False Claims Act also protects employees, contractors and agents who are fired, demoted, threatened or harassed for lawful efforts to stop a violation, including investigating fraud or filing a qui tam case. Remedies include reinstatement, double back pay with interest, special damages, and attorney’s fees. A retaliation claim must generally be filed within three years. California law, including Labor Code 1102.5, may provide additional remedies. See California whistleblower retaliation.

California False Claims Act

California has its own False Claims Act for fraud on the State of California and local governments, such as Medi-Cal fraud and fraud on state and municipal contracts. Relators may receive a share of the recovery under that law as well. California also allows qui tam claims for certain insurance fraud.

Our Role and Fees

We represent relators in qui tam and False Claims Act cases and employees in False Claims Act retaliation claims. Relators pay no attorney fee unless there is a recovery. See also our federal whistleblower lawyer and SOX whistleblower pages.

Helpful resources: U.S. DOJ: The False Claims Act · HHS Office of Inspector General: Fraud · California Attorney General

Frequently Asked Questions

How much can a qui tam whistleblower receive?

Generally 15 to 25 percent of the government’s recovery if the government intervenes, and 25 to 30 percent if it does not. The relator can also recover attorney’s fees and costs from the defendant.

Will my employer know I filed a qui tam case?

Not at first. Qui tam complaints are filed under seal and served on the government, not the defendant. The seal often lasts months or years, but the relator’s identity usually becomes known if the case moves forward.

Do I need documents to file a qui tam case?

You need specific, firsthand knowledge of the fraud. Do not take company documents without legal advice. A lawyer can help you identify and preserve evidence properly.

What if someone else already reported the fraud?

The first-to-file rule generally bars later related cases, and public disclosure of the fraud can also bar a case unless you are an original source. That is why it is important to act quickly.

How long does a qui tam case take?

Often years. The government’s investigation alone can take a year or more while the case remains under seal.

Can I be fired for filing a qui tam case?

Retaliation is illegal. The False Claims Act provides reinstatement, double back pay and other remedies for employees punished for trying to stop fraud on the government.

Related guides: How a qui tam case works · Rewards for reporting fraud · Retaliated for reporting fraud? · Signs of workplace retaliation · How long do I have to sue my employer?