How to Defend a Qui Tam Lawsuit Involving Government Contracts?By Theodore P. Watson, Esq Federal Contract Qui Tam Defense Lawyer.  Qui Tam lawsuits involving United States government contracts can be a traumatic experience. There are many targeted individuals and contractors who end up with guilty verdicts in criminal cases or paying thousands or millions in civil fines without even having a chance at putting forth a viable legal defense, to begin with. This, by itself, proves to be a costly legal mistake.

Federal law enforcement agencies have increased surveillance and investigations of cases alleging fraud against the government. With the vast amount of unlimited resources, the federal prosecutors spend months or even years building a civil or criminal case against you. Improving your chances of prevailing in a False Claims Act and or Qui Tam Lawsuit is the best course of action for any Defendant.

A Qui Tam lawsuit filed under the Federal False Claims Act is based on when your company or an individual who:

  • Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.
  • Knowingly makes, uses, or causes to be made or used, a false record or statement important to a false or fraudulent claim for payment or to an obligation to pay or transmit money or property to the government.
  • Knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government.

Individuals or government contractors can face huge civil fines and also expose themselves to criminal liability and jail time without putting strong legal defense mechanisms in place early in the investigations phase. The following tips can help you to minimize the impact of a case against you.

Get the Facts About the Allegations

The first approach to defending a False Claims Qui Tam lawsuit is to first find out about the case. What does the Relator or the Government claim that your company did wrong?  Unfortunately, Whistleblower cases a filed under seal. The period of time that the case is under seal can be 60 days to sometimes years. This means that you may not know that the case has been filed until the Department of Justice (DOJ) or some other law enforcement agency comes knocking at your door. See information amount being under investigation.

Once the investigation is opened, law enforcement agencies (mainly the Department of Justice (DOJ)) will request documents through subpoenas and Civil Investigative Demands for testimony, etc. It is important to find out whether or not you are a target in the investigation ( just because the answer may be ‘no’ initially does not mean that it cannot change later.) After knowing why you are being investigated, immediately gather all of the facts, names of people involved etc. You should then consult with a government investigations lawyer that understands federal procurement laws. See information about hiring contractor criminal defense lawyers.

Cooperate Reasonably With Federal Investigators

As a potential defendant in a False Claims Act Qui Tam case, you must reasonably cooperate with federal law enforcement. However, do you also have statutory and constitutional rights that you must protect? The general rule is to never admit to anything without legal counsel present. Oftentimes, corporate CEOs, without their attorneys present, will submit to interviews by government investigators with the belief that they are acting in good faith.

This can be a huge mistake because a case can now turn on you as a result of the “volunteered” information. When submitting documents to federal investigative agencies, you should have legal oversight to make sure that you are now waiving your rights or privileges. 

Immediately Look at Your Internal Policies and Controls

When you are defending a Qui Tam lawsuit, having internal policies and controls that contradict the Qui Tam Relator’s allegations can be powerful. For example, having a policy that makes your subcontractor certify to comply with certain FAR and federal statutes could be a mitigating factor when pulled to the carpet as a result of the subcontractor’s violations. Showing that you conducted due diligence can be a mitigating factor. Showing that you strictly comply with internal training requirements can also help your case. See information about subcontractor liability.

Understand the Unique Requirements of Qui Tam Buy American Act Cases

In construction contracts, Qui Tam cases alleging violation of the Buy American Act can be tricky. The federal government scrutinizes your purchasing habits and investigates who your company purchases from, what countries your products come from, and how your overall manufacturing process works.  This is critical to overcoming a Qui Tam lawsuit involving Buy American Act compliance. Having the right False Claims Act Qui Tam defense lawyer on board can make a huge difference.

Understand SBA and Federal Small Business Regulations

Many whistleblowers and Qui Tam actions involve allegations of government procurement fraud resulting in non-compliance with SBA procurement regulations. Cases can include allegations of pass-through contracts, violations of the limitations on subcontracting regulations; SDVOSB fraud and violations of the SBA 8(a) and HUBZone programs. Having a government contract fraud defense lawyer that also understands these complex regulations can substantially improve your chances.

Defeat the Legal Elements of the Underlying Charge

In order to succeed in a False Claims Act case, the Department of Justice ( DOJ) or other federal law enforcement agency must show that the underlying claim ( violation of the Buy American Act) was violated. Without such a violation then there is no false claim to pursue. Showing and documenting your manufacturing and buying practices can be a strong defense against a Buy American Act false claim case.

With Qui Tam cases alleging violations of SBA procurement regulations or small business size standards, having legal representation from professionals that understand the regulations being charged with is critical to a solid legal defense. Federal prosecutors are at a great advantage because they realize that local criminal defense attorneys may not always be well-versed in federal government contract laws. As a result, many defendants end up with criminal convictions and adverse jury verdicts. See 6 Things Contractors Should Be Aware of in Qui Tam Lawsuits & False Claims Act Lawsuits.

Develop a Strong Legal Defense Early

When the learn the details of the case against you, developing a strong legal defense is your first priority. The law enforcement agencies have already spent a large number of resources building a case against you without you even knowing about it. Many government contractors make the mistake of starting out by volunteering information to federal investigations as a good-faith gesture without their attorney present. Although defendants in a False Claims Act or Qui Tam lawsuit must cooperate with law enforcement investigations, the investigator can often take the information provided and use it against the contractor or individual.

This is why understanding the allegations and first developing a strong legal defense is critical. It can be a fatal mistake to wait until there is a grand jury indictment or the case is heading to trial to then posture for your legal defense.

Get Immediate Help From Government Contract Qui Tam Lawsuit Defense Lawyers

When targeted defendants like yourself face the possibility of criminal liability, jail time or civil exposure to hefty fines, hire a Qui Tam or False Claims Act Defense lawyer that understands the underlying legal issues that the federal prosecutors are going after you. Without that aspect of your legal defense, your chances of prevailing are minimized.

Call Watson & Associates Qui Tam defense lawyers for a FREE initial consultation at 1.866.601.5518.