Qui Tam Basics

What is qui tam?

The qui tam, or “whistleblower,” laws are designed to protect against the fraudulent use of public funds. They do so by encouraging people with knowledge of fraud on the government to report their information to the government.  Under qui tam laws, whistleblowers receive a share of the money they help the government recover.  Qui tam laws are contained in federal and State False Claims Acts. Qui tam laws incentivize integrity.

When was the qui tam law passed?

The Federal False Claims Act (FCA) qui tam law dates back to the Civil War.  It was substantially overhauled in 1986 under the Reagan administration.  It allows private citizens (individuals or corporations) to bring a lawsuit on behalf of the government and receive up to 30% of the recovery. The Federal FCA provides for treble (triple) damages and penalties of more than $10,000 per violation for virtually any kind of fraud on federally funded programs. A number of state governments also have adopted False Claims Acts that are substantially the same as the federal statute.

Does the Department of Justice support the qui tam law?

The Department of Justice (DOJ) has called the False Claims Act the “single most important tool U.S. taxpayers have to recover funds lost due to fraud against the government.”   DOJ has noted that “whistleblowers have played a vital role in unmasking fraudulent schemes that might otherwise evade detection. The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes.” The DOJ has praised Senator Grassley and Congressman Berman’s bipartisan efforts to revitalize the FCA in 1986, as a work of “leadership and vision,” and noted that the amount of federal dollars recovered under the act “demonstrates that the public-private partnership encouraged by the statute works and is an effective tool in our continuing fight against the fraudulent use of public funds.”

How much money has the qui tam law recovered?

In 2018, DOJ recovered $2.8 billion under the False Claims Act, $2.1 billion of which was the result of qui tam cases.  As of the end of 2018, the DOJ had recovered more than $59 billion under the False Claims Act since the 1986 amendments, $42.5 billion of which resulted from cases which were initiated by qui tam whistleblowers. Rewards to whistleblowers exceeded $7 billion in total. These numbers do not include Medicaid recoveries to the States or criminal fines arising from qui tam cases, which account for many billions more.  The qui tam law is cost-effective: for every dollar the federal government invests in investigating and prosecuting qui tam cases, it receives over $20 back.

These recoveries show why the qui tam law is the weapon of choice for federal and state prosecutors seeking to recover defrauded taxpayer funds. The qui tam law is a “public-private partnership” of the government and the people.