This column is written and sponsored by Alan Lescht & Associates, PC, an employment litigation firm in Washington, DC, that handles cases involving contract disputes, wage and hour issues, discrimination and retaliation, wrongful termination, whistleblower retaliation and security clearances.
That’s right. The federal government rewards individuals who properly report companies that overcharge or otherwise defraud the government. Last year, the federal government paid out more than $519 million to people who came forward with information that led to the discovery of fraud against the government. These individuals filed lawsuits under the False Claims Act (FCA), which prohibits companies, people, and even local and state governments from submitting false claims for payment to the federal government.
What is a false claim?
Under the FCA, it is illegal to submit a claim for payment to the federal government that you know or should know is false. Some claims are expressly false, like when a doctor bills Medicare for services the doctor did not provide.
Other claims are impliedly false. In a recent case, a company had a contract with the government to provide armed guards. The contractor hired guards that did not meet the shooting accuracy requirements in the contract. Although no one explicitly told the government the guards actually met the contract requirements, the contractor knew the guards were unqualified but billed the government anyway.
FCA violations can occur in any industry that is connected to federal funding. Here are some real-life examples:
- Medicare/Medicaid: IPC Healthcare, Inc., recently paid more than $60 million in settlement after billing Medicare and Medicaid for more expensive services than it provided (commonly known as “up-coding).”
- Defense contractors: A court ordered a defense contractor to pay $24 million for engaging in a bid-rigging conspiracy to inflate prices the contractor charged to ship goods for military families.
- Davis-Bacon Act violations: A construction company recently paid $450,000 in settlement after falsely billing the government for work on a federally-funded highway project in the D.C. area, and failing to pay the employees the hourly rate required by the Davis-Bacon Act.
- Contract procurement: A Virginia-based defense contractor concealed its affiliation with small businesses to improperly win contracts set aside for those small businesses. The company agreed to pay $16 million to settle the claims, $2.9 million of which went to the whistleblower.
How big is the payout?
If you win your case, you can recover between 15% and 30% of the amount the government receives from the guilty party. Therefore, your recovery depends on various factors, such as how much the government recovers, whether the government takes the lead in proving the case, and what the court thinks is fair.
What should I do if I suspect my employer is overbilling the government?
Typically, you must be the first to file the case to be entitled to recovery. Contact an experienced FCA attorney as soon as possible if you know about fraud against the federal government. Call Alan Lescht & Associates today at (202) 463-6036, send us an email, or visit our website and blog.
DISCLAIMER: This article is for general information purposes and is provided only to permit you to learn about Alan Lescht and Associates, PC, and its services. This information is subject to change, may not apply in all cases, and does not constitute legal advice Contact an attorney to obtain legal advice about your case.