Vol. 10, No. 5, Pg. 26. Qui Tam Litigation.

AuthorBy Gregg Meyers

South Carolina Lawyer

1999.

Vol. 10, No. 5, Pg. 26.

Qui Tam Litigation

26QUI TAM LITIGATIONBy Gregg MeyersWhenever a client reports what seems to be improper conduct involving any program directly or indirectly supported by the federal treasury, consider carefully the possibility that a claim might be stated under the False Claims Act, 31 U.S.C. § 3729 et seq.

For example, suppose you are consulted by a person who reports:

* A realtor charged with managing homes under a federal contract decides to generate cash by stealing and selling on the side the major appliances from the houses. The realtor asked your client to help him do it.

* A construction company repairing federal property misrepresents that it has done a detailed analysis to support a cost estimate that is over a million dollars higher than it should be. Your client knows the representation is false and is not "in the files" as is represented.

* A doctor bills Medicaid for services on a date he is out of town. Your client knows the bills from the entire department are not accurate.

In each case, your client may be entitled to report the offensive conduct and receive a stake of up to 30 percent in the government's recovery from the corruption. And in a rare opportunity to do the right thing as well as make a living, you may be entitled to expenses and attorney's fees for bringing the corrupt practices to light.

The Federal False Claims Act, 31 U.S.C. § 3729 et seq., is a complex avenue of relief, but an avenue worth considering. First passed during the Civil War to combat vendors providing fictitious or defective goods to the Union Army, e.g., U.S. ex rel Newsham v. Lockheed Missies and Space Co., 722 F.Supp. 607, 609 (N.D. Cal. 1989), amendments passed in 1986 have made the statute a powerful tool in recovering fraud against the U.S. Treasury.

Those reporting the false or fraudulent activity are given a share of the recovery, and it is this qui tam provision that has attracted attention to the statute since 1986

28amendments made it a more useful weapon in combating fraud. When millions of dollars are involved, and those millions are trebled, 31 U.S.C. § 3730(d), a percentage of the recovery for reporting what has been called the world's second oldest profession-stealing-can combine doing the right thing and being rewarded for it.

However, the False...

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