It’s long been understood that risk and reward are linked, and blowing the whistle through the False Claims Act is no different. The False Claims Act has a very detailed process for filing and pursuing a qui tam claim, and the person bringing the action, the relator, must be represented by an attorney. Whistleblower attorneys help guide whistleblowers through a difficult and long process, investigating, developing and ultimately drafting a lawsuit to file in court and bring to the government in a thorough and straight-forward manner. With the right resources and knowledge, whistleblower law firms can also carry a whistleblower claim through litigation, even if the government chooses not to take the case. If you’re considering becoming a False Claims Act whistleblower, find out what happens when your claim is made and know the details behind the scenes.

• If you’re filing under the federal False Claims Act, first, your whistleblower qui tam complaint is filed under seal in federal court. Generally, your supportive documents and other materials are not filed in court at all, but are provided solely to the Department of Justice. This means that records relating to the case are not public record and not accessible by the media, the public – and most importantly – the company committing the fraud (often the whistleblower’s employer).
• In addition to filing your complaint in court, copies of the complaint are given only to the United States Department of Justice, the local United States Attorney and the assigned judge of the District Court. By that time – if your attorneys act properly – you will have already provided all of your materials and information to the Department of Justice prior to filing suit.
• The Court may make the complaint available to other persons upon motion of the United States Attorney. Your complaint is also provided to any state Attorney Generals’ offices in states where you have invoked state False Claims Act law. These also remain confidential and subject to court seal.
• The documents remain under seal for a period of at least 60 days. The Justice Department can extend this period for good cause shown while they investigate. Generally speaking, these seal periods last for more than one year and often several years.
• Through legal counsel, the whistleblower must serve upon the Department of Justice a “disclosure statement” both prior to filing suit and after filing suit, with respect to any subsequent information gathered by the whistleblower. This contains substantially all material evidence in the possession of the whistleblower about the allegations. This disclosure statement is not filed in any court, and is not available to the named defendant.

During the investigation, the Department of Justice must investigate the alleged violations of the False Claims Act. The investigation usually involves one or more law enforcement agencies such as the Office of Inspector General of the victim agency, the Postal Inspection Service or the FBI. In some investigations where state agencies are victims, state attorneys general with expertise and interest may participate in the investigation and work closely with the federal agencies. The investigation will often result in subpoenas for documents or electronic records, witness interviews, compelled oral testimony from one or more individuals or organizations, and consultations with experts. If there is a parallel criminal investigation, search warrants and other criminal investigation tools may be used to obtain evidence as well. During this time, the whistleblower’s counsel will be in regular contact with the various investigators and enforcement attorneys. At the conclusion of the investigation, the Department of Justice must choose one of the following options:

• Intervene. This means the government intends to participate as plaintiff in the case, leading the case and running the litigation. Less than 15 percent of filed qui tam actions result in an intervention by the Department of Justice.
• Decline to intervene. If the United States declines to intervene, the relator and his or her attorney may prosecute the action on behalf of the United States. The United States is not an active party to the proceedings apart from its right to any recovery, but still retains the right to intervene at a later date and must approve any settlement. This option is frequently used by relators and their attorneys, if the attorneys have sufficient resources and experience to litigate the matter. Though such cases historically have a much lower success rates, relators who do prevail in such cases will get a higher relator's share, about 25 percent to 30 percent.
• Move to dismiss. Either because there is no case, or the case conflicts with significant statutory or policy interests of the United States.
• Settle. The Department of Justice may settle the pending action with the defendant prior to the intervention decision.

If the Justice Department elects to intervene, upon intervention approval, the Department of Justice files a notice of intervention, setting forth the specific claims as to which the United States is intervening, and also files a motion to unseal the qui tam complaint filed by the relator and the notice of intervention. All other documents filed by the Department of Justice up to that point remain under seal. Generally, the other documents filed by the whistleblower (outside of the operative complaint) also remain under seal. Usually the Department files its own complaint, setting forth its statement of the facts regarding the false claims, and the specific relief it seeks. In addition, the Department of Justice has the ability to, and often will, assert claims arising under other statutes (such as Financial Institutions Reform, Recovery, and Enforcement Act of 1989; the Truth in Negotiation Act; or the Public Contracts Anti-Kickback Act), which the relators do not have the legal right to assert in their complaint. After the relator’s complaint is unsealed, the relator through his or her attorney has the obligation under the Federal Rules of Civil Procedure to serve its complaint upon each named defendant within 120 days. Each named defendant has the duty to file an answer to the complaint or a motion within 20 days after service of the government’s complaints. Discovery under the Federal Rules of Civil Procedure begins shortly thereafter, and the case then proceeds according to the Federal Rules of Civil Procedure. Eventually, the action will result in one of the following outcomes:

• The case will settle with the defendant agreeing to pay damages. If this happens, the relator will be entitled to part of the recovery.
• The case will be dismissed by the court (with a right to appeal).
• The case will go to trial.
  • If the defendant is successful the matter will be dismissed.
  • If the relator and government win, the court will order damages. The relator will receive part of these funds plus their legal fees.

While the majority of whistleblower claims go unnoticed or are denied, experienced and dedicated whistleblower attorneys can help prepare your case for success, making your whistleblower claim stronger, more impactful and eye-catching to the whistleblower programs that receive thousands of claims every year. With this direction, even if the government chooses not to intervene in your case, or if you are facing retaliation from an employer, you will be best positioned to come out victorious. Hagens Berman represents several whistleblower actions under the CFTC and SEC Whistleblower Programs, including representation of high-profile market expert Haim Bodek, and marshals its significant nationwide resources and expertise in financial fraud to best present whistleblower matters to the SEC and CFTC.