What the statute prohibits
Seven ways to create liability.
The operative provision — 31 U.S.C. § 3729(a)(1) — lists seven ways a person or company can create False Claims Act liability. In plain English, they are:
- Presentment. Knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval.
- False records. Knowingly making, using, or causing to be made or used, a false record or statement material to a false claim.
- Conspiracy. Conspiring to commit any of the violations in the section.
- Conversion. Delivering less government property than receipts state.
- Knowingly false receipts. Authorizing a receipt without knowing the information is true.
- Purchase from unauthorized persons. Knowingly buying public property from an officer who cannot lawfully sell it.
- Reverse false claims. Knowingly concealing or improperly avoiding an obligation to pay the government.
The first, second, and seventh categories do most of the work. A company that bills Medicare for a service it never provided is liable under (1). A company that submits a certified cost report with inflated labor figures is liable under (2). A company that receives an overpayment and fails to return it within 60 days of discovery is liable under (7).
Actual knowledge isn't required — deliberate ignorance is enough.
Under § 3729(b)(1), "knowingly" means actual knowledge, deliberate ignorance, or reckless disregard of the truth or falsity of the information. A defendant cannot escape liability by claiming it "didn't look." Closing one's eyes to fraud is the same as committing it.
Damages
Treble damages, plus per-claim penalties.
A defendant found liable under the FCA must pay three times the amount of damages the government sustained, plus a civil penalty for each false claim. The penalty range adjusts annually for inflation. As of the latest 28 C.F.R. § 85.5 adjustment, penalties run from approximately $14,308 to $28,619 per claim.
That "per claim" multiplier is what makes FCA exposure catastrophic. A hospital that submits 10,000 false claims of $500 each has caused $5 million in damages — but the defendant's exposure is $15 million trebled plus up to $286 million in per-claim penalties. The threat of that math is why the overwhelming majority of FCA cases settle.
Qui tam procedure
How a whistleblower case actually moves.
The procedure is set out in 31 U.S.C. § 3730. It is unlike any other civil procedure in American law.
1. The complaint is filed under seal.
The relator files the qui tam complaint in federal district court under seal — meaning it is not visible to the defendant, the public, or even most court personnel. A copy of the complaint and a "written disclosure of substantially all material evidence" is served on the U.S. Attorney and the Attorney General. The defendant is not yet served.
2. The government investigates.
The statute gives the government 60 days to decide whether to intervene. In practice, the government routinely moves for — and is routinely granted — extensions that can stretch the seal period to two, three, or four years. During this time, the DOJ issues civil investigative demands, interviews witnesses, and works with relator's counsel.
3. The government decides whether to intervene.
At the end of the investigation, the government either intervenes (takes over primary responsibility for prosecuting the case) or declines to intervene (letting the relator proceed alone, on behalf of the United States).
4. The complaint is unsealed and served.
Only after the government makes its decision does the defendant learn of the case. The complaint is unsealed, served, and the litigation proceeds like ordinary civil litigation — except that the United States remains the real party in interest even when it has declined to intervene.
The relator's share
Between 15% and 30% — but the math matters.
If the government intervenes and the case results in a recovery, the relator receives between 15% and 25% of the gross recovery, with the exact percentage set by the court based on the relator's contribution. If the government declines and the relator prosecutes the case to a successful conclusion, the share rises to 25% to 30%.
There are reductions. If the relator "planned and initiated" the fraud, the court may reduce the share. If the allegations are based on publicly disclosed information and the relator is not an "original source," the case can be dismissed entirely. If the relator is convicted of the underlying fraud, the share is forfeited.
In addition to the relator's share, the defendant is required to pay the relator's reasonable attorneys' fees and litigation costs. That separate fee award is what makes contingency representation economically viable — and it is the reason our firm does not charge our clients any hourly or out-of-pocket fees.
"[A]ny person who [violates the Act] … is liable to the United States Government for a civil penalty of not less than [$14,308] and not more than [$28,619] … plus 3 times the amount of damages which the Government sustains because of the act of that person."
Who cannot bring a case
The first-to-file and public-disclosure bars.
Two doctrines frequently defeat otherwise meritorious qui tam cases. The first is the first-to-file bar, codified at § 3730(b)(5), which prohibits any person from bringing a "related action" based on the facts underlying a pending qui tam action. If another person filed on the same fraud first — even if that earlier complaint was weak, or brought by a less credible relator — the later case is barred.
The second is the public-disclosure bar, codified at § 3730(e)(4). If the allegations were publicly disclosed in specific statutorily enumerated channels — a federal hearing, a federal report, or the news media — the case is dismissed unless the relator qualifies as an "original source." An original source is someone who has knowledge that is independent of, and materially adds to, the public disclosure.
Both bars are analyzed as of the date of filing. Waiting does not preserve a case; it destroys one. This is why we routinely tell people who call us to stop researching their own case on the internet and come in for a consultation.
Anti-retaliation
31 U.S.C. § 3730(h).
The FCA contains its own anti-retaliation provision. An employee, contractor, or agent who is "discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment" because of lawful acts taken in furtherance of an FCA action is entitled to:
- Reinstatement with the same seniority status;
- Two times the amount of back pay, plus interest;
- Compensation for any special damages sustained, including litigation costs and reasonable attorneys' fees.
The retaliation claim is independent of the underlying qui tam case. A relator whose qui tam claim is dismissed may still have a viable § 3730(h) claim — and vice versa.
Statute of limitations
Six years, sometimes ten.
Under § 3731(b), an FCA action must be brought within the later of (1) six years from the date of the violation, or (2) three years from the date when facts material to the right of action are known or reasonably should have been known by the government official charged with responsibility to act — but in no event more than ten years after the date of the violation. The Supreme Court's 2019 decision in Cochise Consultancy v. United States ex rel. Hunt confirmed that relators may invoke the 10-year limitations period even in cases where the government declines to intervene.
Parallel state claims
The federal FCA captures federal money only.
Many fraud patterns involve both federal and state money in the same transaction. A healthcare provider who upcoded Medicare claims usually also upcoded state Medicaid claims. A contractor that overbilled a federal agency often overbilled state or municipal clients using the same false certifications. A company that misused PPP funds may have made parallel false certifications to state pandemic relief programs.
Approximately thirty states, the District of Columbia, and Puerto Rico have enacted their own False Claims Acts that permit whistleblowers to pursue state-level fraud on behalf of the state and to receive a share of the state's recovery. Recovery percentages under state FCAs generally run from 15% to 30% of state damages, with California and Nevada permitting higher maximums. California and Illinois also have separate qui tam statutes covering private insurance fraud.
The Whistleblower Project represents federal FCA relators. Our attorneys are admitted in federal districts and Louisiana, and we do not hold ourselves out as state FCA counsel in other states. But where a federal case has material parallel state claims, we work with the client to coordinate a referral to qualified state counsel in the relevant state. Our goal is to ensure that no claim is waived or lost because of the narrow scope of our federal practice. When you describe your situation in our intake, we ask about state, local, and private-insurance dimensions precisely so we can surface these parallel claims at the beginning of the matter, not at the end.