By Theodore P. Watson, Esq Federal Contract Qui Tam Lawyers. A Qui Tam lawsuit 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, 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.
Basic Whistleblower/Qui Tam Lawsuit Information
When employees or third parties claim that they have information about you or your company attempting to defraud the federal government, filing a whistleblower qui tam lawsuit can give them ( the Relator) huge financial rewards. Keep in mind that if your company retaliates, then the damages in a qui tam lawsuit can be substantial. Knowing how the process works, and how to defend against whistleblower investigations and litigation is essential to the future of the company.
Plaintiffs that file a lawsuit on behalf of the government are called Whistleblower. When allegations and proof of fraud or any other illegal activity that goes against the public interest benefit the government and the taxpayers.
What Are Examples of Government Fraud Schemes?
Your company may have to defend against allegations that can lead to civil or criminal cases or both. Common qui tam lawsuits filed against government contractors include allegations of major fraud against the government (if the contract is over $ 1 million), and violation of the False Claims Act (FCA). Fraud schemes involving the FCA impose liability on federal contractors, small businesses and individuals proved to have defrauded the government.
Government contract fraud is possible in various industries. Common types of fraud include:
- Healthcare fraud
- Environmental fraud
- Buy American Act Fraud
- Medicare and Medicaid fraud
- Defense contractor fraud
- Pharmaceutical fraud
- Federal crop insurance fraud
- Construction fraud
How Does the Law Protect Whistleblowers?
Federal law allows protection when there is evidence of whistleblower retaliation. The False Claims statute allows for protection against retaliation: Government contractors or employers cannot harass Whistleblowers, threaten, demote, fire, or otherwise discriminate against them because of the decision to report fraud. Defending your company against allegations of whistleblower retaliation can be tricky. Having the right qui tam defense lawyer can make a huge difference against you paying large fines or being indicted in a criminal case.
Can Government Employees Become Whistleblower / Relator?
Federal Government employees can become file qui tam lawsuits against the government. The Whistleblower Protection Act is a federal law that provides Relators or employees with protection for fraudulent and unlawful behavior on the part of the U.S. government:
- Violations of the law, rules, or regulations
- Abuse of authority
- Gross waste of funds
- Gross mismanagement
- Substantial danger to public health or safety
How Can a Whistleblower Qui Tam Defense Attorney Help You?
Whistleblower lawsuits are complex and tricky. Government contractors and employers often hire local counsel that may not quite understand the substantive laws and procurement regulations. This is especially true for government small business programs and issues regarding contracting administration. Our Whistleblower Qui Tam defense attorneys can help on issues involving federal government contracting. They can:
- Evaluate the underlying allegations
- Respond to federal prosecutors
- Help with subpoena responses
- Provide corporate investigations
- Represent in both criminal and civil cases.
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 lawyers 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 attorney and Qui Tam 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 agencies 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 they learn the details of the case against you, developing a strong legal defense is your first priority. 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 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 defesne Qui Tam lawyers for a FREE initial consultation at 1.866.601.5518.