The federal False Claims Act — as well as state False Claims Acts — rewards the people who provide information about companies and individuals who cause federal and/or state government entities to pay these parties more than they’re entitled to receive. These statutes also permit whistleblowers to jointly bring False Claims Act lawsuits and then jointly share in the successful outcome of the case. As the saying goes, “the more the merrier.”
The success of a False Claims Act case depends upon the quality and quantity of the evidence the whistleblower can provide to the government illustrating that the government is the victim of fraud. However, because of the many discreet details necessary to fully depict, and ultimately prove, a complex fraud scheme, the more insider perspectives that relators can add to a complaint, the more likely that that complaint will be able to avoid the various arguments that defendants present to defeat whistleblowers’ claims. Accordingly, it is often beneficial for multiple persons with information about the fraudulent scheme at issue to combine their efforts with joint allegations. When multiple persons are willing and able to come forward with complementary and/or corroborative evidence of the same fraudulent behavior, they are often able to present a greater volume of compelling evidence collectively than any of them could present individually. The more employees who have evidence of the wrongful behavior, the greater the likelihood of establishing a winning case.
Often, fraud realized by one person is seen and/or experienced by many others in the same working circumstances. For example, on a construction site where a project is funded by federal and/or state government entities, laborers may complain to each other that their employer is not paying them at the proper pay scale or that the employer is not paying for overtime as the government contract requires. This behavior may cause the employer to violate various laws like the Davis Bacon Act and the Fair Labor Standards Act. These hypothetical construction workers may also complain that the employer has misclassified them and pays them, for example, at a pay rate commiserate with a laborer when, in fact, the workers are performing the work of a highly-skilled craftsperson like a plumber or electrician, which may be in violation of the federally- and/or state-funded contract.
Similarly, coworkers in an office setting may express concerns that their company’s government contract is based on inflated and/or false pricing, causing the government to overpay the company for its service or product. In a doctor’s office, staff may express concerns to each other that a physician is receiving special gifts such as lavish dinners, vacations, or other kickbacks from a pharmaceutical company in exchange for the physician’s prescribing of a drug. In a hospital, nursing home, or physician’s office, the billing staff may realize that they are being told to bill Medicare and Medicaid for tests and procedures that have not been performed. The billing staff may also be concerned that they are told to bill twice for a procedure when it was only done once.
All of the above circumstances could constitute violations of federal and/or state False Claims Acts and would benefit from a multiple-relator arrangement that may add evidence, context, and perspective to the fraud allegations.
Potential relators considering a co-relator arrangement must make certain preparations to protect their interests. For example, they need to be mindful of the overall sensitivity of False Claims Act suits, the negative effects they can have on employment, and the potential for seemingly sympathetic colleagues to have differing opinions, and allegiances, with regards to the allegedly fraudulent behavior. Potential co-relators will also have to reach a fee-sharing agreement and sign conflict-of-interest waivers allowing for joint representation of two or more clients by one firm. Despite these things, the benefits of a co-relator arrangement may outweigh the risks and alternatives. Potential relators should contact experienced whistleblower attorneys to discuss their options.