False Claims Act: Filing a Whistleblower Claim Can Be a Tough Act

September 20, 2012 (Press-News.org) False Claims Act: Filing a Whistleblower Claim Can Be a Tough Act

Noticing that a company is involved in defrauding the government is one thing. It's another thing to move forward with that information. The decision to file a whistleblower lawsuit is a difficult one. Individuals who file whistleblower claims often face retaliation by their employers, risking damage to reputation, demotion, and job loss, among other adverse employment actions. Federal laws like the False Claims Act and state laws protect whistleblowers, but employees who suspect their employers of wrongdoing should seek legal counsel before acting, because those who take the risk may not always get the reward.

The financial rewards for exposing fraud can be high, but the experience a whistleblower may go through can be unpredictable and uncertain as his or her financial security and stability can be threatened by airing an employer's dirty secrets. Take the case of James Holzrichter, whose whistleblower story was featured in the Huffington Post. Holzrichter informed the government of his employer's fraudulent activities under the False Claims Act and received a reward of $6.2 million. However, his path was not easy.

Holzrichter filed his whistleblower lawsuit in 1989 and the case did not conclude until 2005. During that time, Holzichter claims he was blacklisted as an auditor and had to take up work as a janitor and newspaper deliverer to support his wife and four children. At one point, he had to move his family into a homeless shelter. Making it even more difficult, Holzrichter could not tell his family about the lawsuit for a period of time because whistleblower cases based on the False Claims Act are filed under seal to not jeopardize the case while the government investigates.

Working with an experienced whistleblower lawyer can help an employee lay out concerns and consequences before deciding to move forward with a claim. Those considering a whistleblower lawsuit should be aware of some important issues. In order to be eligible to recover a reward specifically under the False Claims Act, a person must file a qui tam lawsuit, which involves more than just informing the federal government about the potential violation. In addition, a person can only receive an award if the federal government recovers money from the defendant as a result of the lawsuit.

After a qui tam action is filed, the case is placed under seal for at least 60 days and sometimes up to two years or more. During the seal period the government investigates the claim, and druing the seal period the government chooses to either intervene and move forward with the lawsuit or decline the action.

Also, if another private party or the government has already filed a False Claims Act lawsuit based on the same allegations, an individual will be barred from bringing a lawsuit under the facts. However, if the allegations are different than an earlier suit, the person may be able to file. The earlier case may be under seal, so it may be difficult to determine whether the earlier case is based on different allegations. Finally, since qui tam litigation is complex, the case can last multiple years.

Filing a quit tam lawsuit is complicated and can involve risks. Therefore, it is important to work with an experienced whistleblower attorney when deciding whether to move forward with the process.

Article provided by Thomas & Associates
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