What is the False Claims Act (FCA)? If you’ve uncovered fraud against the government, that question might be your first step toward taking legal action.
Whether you’ve seen shady billing practices, kickback deals, or made-up records, the False Claims Act allows you to report that fraud. You may also be eligible to receive a financial award if your case helps the government recover public funds.
This guide breaks down the history of the False Claims Act, how it works, who it protects, and how whistleblowers have used it to fight fraud.
What Is the False Claims Act?
The False Claims Act is a federal law that allows private individuals to report fraud against the government and file lawsuits on the government’s behalf. If the case leads to a financial recovery, the whistleblower may receive a share of the money.
Congress passed the law to stop businesses and individuals from cheating public programs like Medicare, Medicaid, and the United States military.
People often file these cases under the False Claims Act’d qui tam provision, which allows for a private citizen to sue on behalf of the government and potentially receive a reward if the case succeeds.
The False Claims Act reaches many industries beyond healthcare. It may cover defense contracting, construction, education, and pandemic relief. Anyone who knowingly overbills or underdelivers when using federal money may violate the FCA.
This broad reach makes it one of the government’s most powerful tools to detect, investigate, and punish fraud on taxpayer programs.
The History of the False Claims Act
The FCA dates back to the Civil War, when dishonest contractors sold the Union Army defective supplies. In 1863, Congress created a law allowing citizens to sue those defrauding the government.
Over time, Congress strengthened the law. It was most notably altered in 1986 after a wave of defense contractor scandals.
Today, the FCA plays a key role in fighting healthcare, military, and COVID-19 relief fraud. It has helped recover billions for taxpayers and reward whistleblowers for taking the risk of coming forward.
Since the 1986 amendments, whistleblowers have helped the government recover more than $85 billion. The law continues to evolve with changing threats and enforcement priorities.
For instance, the Department of Justice (DOJ) has emphasized targeting fraud related to telehealth, cybersecurity, and opioid prescriptions in recent years.
How Does the Process Work?
If you suspect fraud and want to file a qui tam case, here’s what the process typically looks like:
- Hire a whistleblower attorney;
- Your attorney files a complaint in court and under seal;
- The Department of Justice (DOJ) investigates and decides whether to join the case;
- If the case proceeds, it may lead to a settlement or court judgment; and
- If successful, you may receive a reward based on the amount recovered.
Filing a case under 31 U.S.C. 3730 means it stays confidential while the government investigates. The confidential investigation period gives the government time to assess your claims without alerting the defendant to the investigation.
This phase may take years, depending on the complexity of the case and the amount of evidence involved.
Whistleblower Protections Under the FCA
Coming forward can feel risky, especially if your job is on the line.
The FCA offers whistleblowers strong protections against retaliation, including:
- Reinstatement if you were fired or demoted;
- Back pay with interest; and
- Compensation for legal costs and emotional distress.
These protections apply when you report fraud in good faith, even if the case doesn’t result in a settlement or court win. They also create a strong legal incentive for employers to take internal reports seriously.
Employers who retaliate against whistleblowers may face separate liability under the FCA’s anti-retaliation provisions.
What Kind of Fraud Does the FCA Cover?
The FCA applies to any fraud that results in the government paying more than it should or receiving less than it is owed.
Common areas include:
- Overbilling Medicare or Medicaid;
- Falsifying records for government contracts;
- Charging for services never provided; and
- Providing defective products or services to federal agencies.
A wide range of people file claims under the qui tam False Claims Act provisions, including billing staff, nurses, contractors, and auditors.
Even seemingly minor fraud can lead to hefty penalties if it involves repeated misconduct over time. That’s why whistleblowers who report even minor schemes can trigger major investigations.
How Much Can a Whistleblower Recover?
Whistleblowers may receive up to 30% of the total recovery. The amount the whistleblower receives (if any) depends on several factors, including the timing of the report, the originality of the information, whether the government joins the case, and the whistleblower’s cooperation with investigators.
Whistleblowers who provide key evidence early in the process often receive higher percentages. These rewards can be substantial.
What Kinds of Damages Can the Government Recover?
When a defendant loses or settles an FCA case, they may have to pay:
- Three times the amount of money the government lost (called treble damages);
- Civil penalties for each false claim submitted; and
- Attorney’s fees and other associated costs.
The FCA outlines civil penalties of not less than $5,000 and not more than $10,000 per violation. However, these amounts are regularly adjusted for inflation. In 2024, the DOJ announced that civil penalties per claim had increased to between $13,946 and $27,894 per violation. This means a company submitting hundreds of false claims could face tens of millions of dollars in penalties.
These False Claims Act damages add up quickly in large-scale fraud cases. Serious FCA violations may also lead to criminal prosecution, including fines or prison time.
State False Claims Acts
Many states also have their own versions of the False Claims Act. These laws mirror the federal FCA and allow whistleblowers to report fraud involving state-funded programs like Medicaid.
State-level claims can be filed separately or alongside federal claims, depending on where the fraud occurred. If a case involves both federal and state funds, whistleblowers may be eligible for additional recovery under state FCA statutes. Consult an attorney if you’re unsure whether your state has its own FCA.
Why Whistleblowers Matter
Whistleblowers play a critical role in protecting public funds. Many government agencies would never uncover these schemes without inside help. By stepping forward, you can protect patients, stop waste, hold wrongdoers accountable, and support ethical practices.
Filing a whistleblower claim isn’t only about getting a reward; it’s about stopping misconduct that threatens public resources and trust. With legal support, you can take action in a way that protects your rights and contributes to public accountability.
FAQs
How Does Someone Blow the Whistle?
Start by explaining the suspected fraud or wrongdoing to an experienced attorney. If you have a potential case, work with your attorney to file a sealed complaint under the False Claims Act. The complaint starts the process for the government to investigate and decide whether to pursue the case.
Can a Whistleblower Remain Anonymous?
Whistleblowers remain anonymous during the government’s investigation. In rare cases, they may seek to extend their anonymity longer by filing under a pseudonym or through an entity. However, most courts require the whistleblower’s identity be disclosed once litigation begins.
Can a Whistleblower Receive a Monetary Award for Coming Forward?
Yes. If the case leads to a financial recovery for the government, the whistleblower may receive 15% to 30% of the amount recovered. The award depends on several factors, including the quality of the evidence and whether the government intervenes.
How Long Does a False Claims Act Case Take to Resolve?
FCA cases are complex and often take several years to resolve. The government’s investigation alone can last one to three years or longer, depending on the scope of the fraud. If the case proceeds to trial, it can take even more time. Patience and strong legal guidance are key throughout the process.
Choose Reese Marketos for Your FCA Case
If you’re considering reporting fraud and want to know your options, you deserve legal counsel with deep experience in False Claims Act litigation.
Reese Marketos LLP is a nationally recognized trial firm with a proven record of representing whistleblowers in high-stakes FCA cases across industries. Our team has been behind a number of the most significant whistleblower victories of the decade.
Our team includes former federal prosecutors and skilled trial lawyers who understand the legal and human sides of whistleblower litigation. We’ve helped clients succeed in FCA cases the government initially declined and many other firms would not have taken.
We understand the pressure, risk, and courage required to come forward. Our attorneys have the courtroom skills and strategic insight to protect whistleblowers and build credible, trial-ready qui tam cases.
Contact us online or call (214) 382-9810 today for a confidential consultation. We know how to take whistleblower claims from investigation to resolution. We’ll help you determine whether you have a case, risks to consider, and how best to proceed.