The Federal False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., is probably the best-known whistleblower statute, allowing private plaintiffs to bring suit on behalf of the Government in a qui tam suit. The federal Government also provides other, less well-known avenues for whistleblowers to shed light on corporate wrongdoing in return for a portion of the Government’s recovery if the case is successful.[1] The Federal Government recovers billions of dollars every year by actions brought under the FCA[2]—in no small part as a result of the efforts of the brave individuals who are willing to step forward and blow the whistle.
Corporate fraud is not limited to conduct by companies that provide goods or services to the Federal Government or are otherwise federally funded—but neither are the opportunities for whistleblowers with knowledge of that fraud. To date, 30 States and the District of Columbia have enacted state counterparts to the Federal FCA that contain whistleblower provisions. Under these State laws, whistleblowers can combat fraud and claim a portion of the recovery, just like they can under the FCA.
The following 21 States have enacted laws with a scope similar to that of the Federal FCA that allow whistleblowers to file qui tam suits: California,[3] Delaware,[4] Florida,[5] Georgia,[6] Hawaii,[7] Illinois,[8] Indiana,[9] Iowa,[10] Maryland,[11] Massachusetts,[12] Minnesota,[13] Montana,[14] Nevada,[15] New Jersey,[16] New Mexico,[17] New York,[18] North Carolina,[19] Rhode Island,[20] Tennessee,[21] Vermont,[22] and Virginia.[23] The District of Columbia likewise has a general fraud statute permitting qui tam actions by whistleblowers.[24]
The following 9 states have enacted narrower fraud statutes permitting qui tam suits by whistleblowers, limited to claims relating to Medicaid and other state-administered healthcare funds: Alaska,[25] Colorado,[26] Connecticut,[27] Louisiana,[28] Michigan,[29] New Hampshire,[30] Oklahoma,[31] Texas[32] and Washington.[33]
Even when there is no state law analogy of the FCA that permits whistleblowers to file a qui tam suit to combat fraud, whistleblowers may still be entitled to a portion of the State’s recovery under that State’s laws. For example, Arkansas and Missouri both allow individuals who report fraud to the State Attorney General to receive up to 10% of the amount recovered in a fraud action against a Medicaid provider.[34]
While much fraudulent activity that affects state government likely remains unreported, these laws have allowed State Governments to recover hundreds of millions of dollars.[35] If you have knowledge of fraud by state contractors or other state-funded entities, consider reaching out to a whistleblowing attorney.
Footnotes
[1] See Shaun Rosenthal, The Underutilized False Claims Act and Other Whistleblower Statutes, Working for Justice (June 27, 2019), https://sanfordheisler.com/the-underutilized-false-claims-act-and-other-whistleblower-statutes/.[2] See, e.g., Press Release, U.S. Dept. of Justice, Justice Department Recovers Over $2.8 Billion from False Claims Act Cases in Fiscal Year 2018 (Dec. 21, 2018), https://www.justice.gov/opa/pr/justice-department-recovers-over-28-billion-false-claims-act-cases-fiscal-year-2018.[3] Cal. Gov. Code §§ 12650 et seq.[4] Del. Code Ann. tit. 6, §§ 1201 et seq.[5] Fla. Stat. §§ 68.081 et seq.[6] Ga. Code Ann. §§ 49-4-168 et seq. (for Medicaid claims); Ga. Code Ann. §§ 23-3-120 et seq. (general statute).[7] Haw. Rev. Stat. §§ 661-21 et seq.[8] 740 Ill. Comp. Stat. 175/1 et seq.[9] Ind. Code §§ 5-11-5.7 et seq. (for Medicaid claims); Ind. Code §§ 5-11-5.5 et seq (general statute).[10] Iowa Code §§ 685.1 et seq.[11] Md. Code Ann. §§ § 2-601 et seq.[12] Mass. Gen. Laws. ch. 12 §§ 5 et seq.[13] Minn. Stat. §§ 15C.01 et seq.[14] Mont. Code Ann. §§ 17-8-401 et seq.[15] Nev. Rev. Stat. §§ 357.010 et seq.[16] N.J. Stat. Ann. §§ 2A:32C-1 et seq.[17] N.M. Stat. §§ 27-14-1 et seq. (for Medicaid claims); N.M. Stat. Ann. §§ 44-9-1 et seq. (general statute).[18] N.Y. State Fin. Law §§ 187 et seq.[19] N.C. Gen. Stat. §§ 1-605 et seq.[20] R.I. Gen. Laws §§ 9-1.1-1 et seq.[21] Tenn. Code Ann. §§ 71-5-181 et seq. (for Medicaid claims); Tenn. Code Ann. §§ 4-18-101 et seq. (general statute).[22] Vt. Stat. Ann. tit. 32 §§ 630 et seq.[23] Va. Code Ann. §§ 8.01-216.1 et seq.[24] DC Code §§ 2-381.01 et seq.[25] Alaska Stat. §§ 09.58.010 et seq.[26] Colo. Rev. Stat. §§ 25.5-4-303.5 et seq.[27] Conn. Gen. Stat. §§ 4-274 et seq.[28] La. Stat. Ann. §§ 437.1 et seq.[29] Mich. Comp. Laws §§ 400.601 et seq.[30] N.H. Rev. Stat. Ann. §§ 167:61-b et seq.[31] Okla. Stat. §§ 63-5053 et seq.[32] Tex. Hum. Res. Code §§ 36.001-132.[33] Wash. Rev. Code. §§ 74.66.005 et seq.[34] Ark. Code Ann. §§ 20-77-901 et seq.; Mo. Rev. Stat. § 191.900 §§ 191.900 et seq.[35] See, e.g., Press Release, Cal. Dept. of Justice, Attorney General Becerra Announces $150 Million Settlement Against Morgan Stanley for Misleading California’s Teachers and Workers with Pensions (Apr. 25, 2019), https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-150-million-settlement-against-morgan-stanley ($150 million settlement in case brought under California’s False Claims Act); Press Release, Cal. Dept. of Justice, Attorney General Becerra: BP Energy Company Pays $102 Million in Settlement for Overcharging Californians for Natural Gas (Jan. 11, 2018), https://oag.ca.gov/news/press-releases/attorney-general-becerra-bp-energy-company-pays-102-million-settlement ($102 million settlement in case brought under California’s False Claims Act).