How To Decide Charges Have Merit

There are many questions that you need to explore to see if you have a potentially successful qui tam case before you file or retain an attorney. Taking the time now to analyze your position can save a lot of time and frustration later.

First and foremost, you must ascertain that what you see is fraud and not just waste and mismanagement. The government cannot sue a contractor for stupidity on its part or on the part of the government. Some situations that appear to be intentional fraud may turn out to be a contractual dispute, the government agent's nonfeasance, or just plain mistakes. However, if the contractor intended to give false information to the government for payment and the government agent went along with it, you still have a cause of action. As you are examining the fraud, keep in mind that the government agent that may be approving it cannot obligate the government beyond the rules and regulations of the government. If necessary, the government agent may have to be named in the suit as a party to the fraud. Most of the time a government agent in this potential predicament would feign ignorance to the fraud and not admit to acquiescence.

Another problem with government acquiescence is that sometimes the government legally gives waivers to contractor wrongdoing to cover the fraud and avoid embarrassment. If the contracting officer gives a legal waiver to a contractor malfeasance, this can make your case more difficult to prove. However, a skillful attorney can overcome many government acquiescence problems.

You also need to ascertain if federal money is involved in the fraudulent payments to the contractor. This could include state, city or county money that was given to the local government by the federal government or through matching funds for many different federal programs and grants. For example, states run the federal Medicaid programs, but the money, or part of the money, originated with the federal government.

You need to examine how widespread the fraud is in the company. Whistleblowers often see only a slice of the fraud and you increase the odds of a successful and large recovery for the government if you suspect that the fraud is systemic or wide spread. Although sometimes it is hard to tell how far the fraud goes without company records, it is useful to carefully check with other employees or former employees on whether they experienced the same fraud in their departments. Also, it can be helpful to have more than one relator on the lawsuit, especially if each relator has seen the same fraud in different areas of the company.

How old are the fraudulent acts? The statute of limitations for the False Claims act is vague and open to legal interpretation. You need to know how old the fraud is so that you and your attorney can decide about the statute of limitations for your suit.

The type and amount of your documentation is going to be very important. It helps to have diaries and logs kept by you of fraudulent activity, but actual documentation from the company records that support your claim will strengthen your case much more. Without internal company documents, your accusations of fraud could turn into your word against a group of powerful executives. As an example, records of billings, memoranda, time cards, and computer printouts can be very helpful depending on what the fraud scheme is. However, be aware that it could be illegal to remove certain company records and you should consult legal advice before removing anything that could be deemed as company proprietary or confidential.

Organize your documents in a coherent manner before you see the attorney. NEVER give an attorney or anyone else your original documents and it is advisable to have copies of your documents stashed somewhere other than your house. Documents have the confounding habit of disappearing just when you need them. Protect them well since they may be the most important aspect of your case.

If you do keep a log, don't enter your personal observations and prejudices and try to keep it dry and factual. Remember to date each entry. If you have an especially memorable event, write yourself a memorandum for the record and mail a copy to yourself. This way, if it comes down to your word against others, you have a postmarked memorandum written at the time of the event.

One of the first things an informed attorney will want to know is if you are an "original source" of the information. There are several exceptions to your standing as an "original source" and you should be knowledgeable about them before you go to an attorney.

Many types of people can be a qui tam relator if you are the original source of the information, but some relators are more successful than others. Although there is currently no law against a federal employee filing a qui tam case, the Department of Justice looks upon the case with prejudice and may file a court challenge to remove the federal employee relator. Unfortunately, this has caused many attorneys to be wary of federal employees as relators. One possible solution is to get another relator on the suit with the federal employee who works for the company. State employees are not as likely to have this problem because the Department of Justice will not have the same prejudices against them. If you are a subcontractor or a private contractor, you can have a successful qui tam case, but most likely will not be protected under the whistleblower clause of the act.

If you decide there is a fraud against the government in your company that would qualify as a qui tam action and you have obtained good information substantiating the fraud, be careful who you talk to in the company about the matter. You will be surprised how quickly information will leak out and jeopardize your efforts. Also, be careful of so called "internal hotlines." There have been many horror stories of employees providing information about fraud through a company hotline and having the company end up investigating, discrediting, and harassing the whistleblower. There have been cases where "internal hotlines" were used as a tool to identify potential "troublemakers" that they can harass and force out of the company. As a general rule, company hotlines are good for those who would blow the whistle on individual employees who, for example, mischarge on their timecard because they were late for work, but does not tend to work when information is provided about systemic fraud that may be known and directed by high level management (high level management normally operates the hotline).

Also, be careful about who you report the fraud to in the government as there have been many instances of the information, and the identity of the whistleblower, leaking back to the company. Your best bet, if you feel the need to report the fraud to the company, or the government, is to seek legal advice regarding your options before you do so.

Finally, there are a series of personal questions you should answer after consultation with your family. Whistleblowing is not an easy thing to do and a qui tam case can drag on for years. Think about your answers to the following questions:

Are my family and I financially and mentally ready for a protracted fight to prove the fraud and try to retain my job?
Am I mentally ready to have my fellow workers and perhaps my friends turn against me because of my lawsuit?
Am I ready for personal attacks against my character and to have my past indiscretions made public?
Do I have adequate documentation to prove my charges without having to return to my workplace?
Am I sure that my motivations are to expose the fraud to recover money for the government and not just sour grapes, revenge, or public attention. (All these things fade as the case drags out and will not sustain you in your fight.)
Am I financially and mentally ready to change my career to work outside my current field?

It is important for you and your family to come to an agreement on whether you should file a suit. All whistleblowing activity has proven to be very hard on a whistleblower's personal life.