qui tam lawsuit

Recent amendments to the federal False Claims Act have expanded whistleblower protections and increased penalties for violators.  The amendments came in the form of the federal Deficit Reduction Act, the Fraud Enforcement and Recovery Act, the Affordable Care Act, and the Dodd-Frank Act.

California revamped its own False Claims Act earlier this year to bring it into compliance with federal law—and qualify for a 10 percent increase in its share of False Claims Act recoveries in cases relating to the submission of false or fraudulent claims to California’s State Medicaid program.  If a State obtains a recovery as a result of a State false claims action relating to fraudulent claims under the State Medicaid program, it must share the recovery with the federal government in the same proportion as the matching funds provided by the federal government for the state’s Medicaid program, called the federal medical assistance percentage. However, when states, such as California, enact state False Claims laws that are in compliance with federal law, those states get to keep an additional 10% of the recovery, thus sharing 10% less of any recovery in proportion to the federal medical assistance percentage.

For example, if the federal medical assistance percentage for a state is 60%, then the state would retain 40% of the recovery and the federal government would be entitled to the remaining 60% of the recovery.  But if the state has its own False Claims Act that is in compliance with federal law, that state would retain 50% of the recovery, and the federal government would receive the remaining 50%.

Under the qui tam, or whistleblower, provisions of the U.S. and California False Claims Acts, a private citizen with knowledge of fraud can sue on behalf of the government and claim a share in the recovery.  Many state and federal probes into Medicare and Medicaid fraud, and government contract fraud are initiated by whistleblower complaints. 

New York’s False Claims Act law was determined to no longer be in compliance with federal law.  New York has since submitted a revised statute to the Inspector General for the U.S. Department of Health and Human Services, and awaits word on whether the revised statute meets federal requirements and qualifies for the 10% incentive.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

A federal jury found for whistleblowers in reaching a verdict that State Farm Fire and Casualty Co. knowingly provided fraudulent claims to the federal government under the flood insurance program for Hurricane Katrina regarding damage to at least one home, the San Francisco Chronicle reported on Tuesday.  In reaching its special verdict, the jury found that State Farm caused damages to the government in the amount of $250,000.  Under the False Claims Act, the relators, known as whistleblowers, may file a motion with the court to triple the amount of damages found by the jury to $750,000.  Additional damages, as well as the share of proceeds to be awarded to the whistleblowers, is yet to be determined.

State Farm allegedly paid policy limits of $250,000 for flood damage to Thomas and Pamela McIntosh’s home in Biloxi, Miss. even though the damage was caused by wind.  Wind damage would have been covered under State Farm’s policy, while flood damage was covered by a National Flood Insurance Program (NFIP) policy issued by State Farm.  Under the NFIP, State Farm would be reimbursed by the government for claims covered by the flood damage policy.  By charging the NFIP for losses, State Farm minimized its own payments for wind damage while shifting payment for hundreds of thousands of dollars to the government.  The jury found that the house suffered $0 worth of flood damage, and that State Farm overcharged the NFIP the full $250,000.

According to the Sun Herald, this verdict may open the case to potentially thousands of post-Katrina flood claims adjusted by State Farm and paid by the NFIP.  The whistleblowers alleged that State Farm trainers told adjustors that Hurricane Katrina was a “water storm” and that all major damage to homes was caused by flooding, all while delaying their own assessments of wind damage claims.  State Farm also allegedly pushed the NFIP to relax their rules and requirements for adjusting flood claims. 

The suit was originally filed by Kerri and Cori Rigsby under the qui tam, or whistleblower, provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud committed against the government to sue on the government’s behalf and claim a share of the recovery.  The Rigsbys were employees of a contractor hired by State Farm to help adjust the deluge of claims that followed Hurricane Katrina. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Earlier this month, the U.S. Court of Appeals for the Eighth Circuit upheld the federal district court's decision that the two whistleblowers, or relators, in Rille et al v. Accenture, LLP et al, No. 11-2054 (8th Cir. 2013) were entitled to a 15% share of the federal government's $46 million False Claims Act settlement with Hewlett-Packard, amounting to a $6.9 million award to the whistleblowers.

The relators, Norman Rille and Neal Roberts, filed a <i>qui tam</i>, or whistleblower, action in 2004 against HP and other defendants on behalf of the United States, alleging that the defendants gave kickbacks to consultants in exchange for recommendations and engaged in pricing schemes that cost the federal government millions of dollars.

In 2006, the government intervened and filed its own complaint against HP and the other defendants, and eventually entered into a settlement in which the government received $55 million: $9 million from the kickback scheme and $46 million for the pricing scheme.  While the government conceded a share of the kickback settlement to the relators, it attributed the pricing settlement to its own investigation, and not the relators'.

The district court found in favor of the relators, writing that "the government had no knowledge of the defective pricing before Relators brought it to light."  The government appealed.  The Court of Appeals affirmed the district court's decision, upholding the whistleblowers' entitlement to 21% of the $9 million kickback settlement and 15% of the $46 pricing settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.