Ashcraft & Gerel LLP The Victims' Rights Law Firm Washington, D.C. Maryland (Baltimore Landover Rockville) Virginia

WHISTLE BLOWER LITIGATION UNDER THE FEDERAL FALSE CLAIMS ACT -- QUI TAM CLAIMS Introduction To Qui Tam History of Qui Tam Provisions Qui Tam Government Fraud Claims Today Conduct Giving Rise to Qui Tam Federal Whistleblower Claims Procedure and Recovery     Discreet - Confidentiality Guaranteed - No Obligation - You Will Decide If & When To Blow The Whistle - Contact Us To Speak to a Qui Tam Lawyer

	Please click here to see our new page discussing GSA Best Price Qui Tam claims, in which government contractors violate the False Claims Act by failing to give the Government the "best price" they charge private sector purchasers.
	Announcement - Suit Filed Against American Red Cross: Ashcraft & Gerel, representing former American Red Cross Director of Quality Audits, files Federal Qui Tam lawsuit in the United States District Court for the District of Columbia, alleging the Red Cross concealed hundreds of violations of prior consent decree regulating the safety and purity of blood collected by it. The lawsuit alleges the violations were concealed in order to avoid huge penalties under the consent decree. The former Red Cross Director of Quality Audits is alleged to have been fired for repeatedly urging the Red Cross to Comply with the consent decree. A copy of the Federal lawsuit in .pdf format can be downloaded by clicking here.
	Announcement: Ashcraft & Gerel attorneys Vince McKnight and Al Kennedy represent Federal whistle blower in Qui Tam lawsuit against OfficeMax for violating Federal Trade Agreements Act by selling office products to US government agencies made in countries not having reciprocal trade agreements with US - China is one such country - OfficeMax agrees to pay $9.8 million to settle.
	Office Max previously settled for $9.8 million and now Office Depot has agreed to pay $4.75 million to settle allegations that it submitted false claims when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies. Ashcraft & Gerel's Vince McKnight and Al Kennedy filed the Qui Tam complaint responsible for these settlements. These two defendants have now paid a total of over $14 million, and our clients who served as the relators will now receive a generous portion of the funds recovered from the defendants.
	UPDATE October 18, 2005:
	Previous settlements in the "Office Products" Qui Tam claims totaled over $14 million. On October 18, 2005 the United States government in a press release announced that Staples, Inc. has paid an additional $7.4 million to settle a case brought against it by Ashcraft & Gerel's Vince McKnight and Al Kennedy under the False Claims Act on behalf of clients, Safina Office Products and two of its executives, Edward Wilder and Robert Hsi Chou Lee. Including smaller settlements that have not garnered as much publicity as the settlements paid by these larger defendants, over $22 million has now been paid in settlement of the "Office Products" Qui Tam claims brought by Ashcraft & Gerel, LLP.  Government Executive Magazine reported on the Office Products whistleblower cases in its January, 2006 issue. It quoted Ashcraft & Gerel lawyer Vincent McKnight as follows: 'Vincent McKnight, Safina's lawyer, rejects the idea that the defendants might have made an innocent mistake: "If you're not willing to go the extra mile, maybe you should back off and just sell to private citizens. But if you want that prize customer [the government], the law requires you take the extra step.' " The full article can be accessed by clicking here.
	UPDATE February 11, 2006:
	Corporate Express Office Products has now paid $5.02 million to settle allegations that it violated the False Claims Act when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies. The allegations were first raised by Ashcraft & Gerel on behalf of its client, Safina Office Products. The total amount now paid in settlement of the "Office Products" Qui Tam cases is over $27 million.

INTRODUCTION TO QUI TAM:

Qui Tam : An abbreviated version of the Latin phrase "Qui Tam pro domino rege quam pro si ipso in hac parte sequitur," which means "Who sues on behalf of the King, as well as for Himself." In Qui Tam litigation a private citizen (the whistleblower) who knows of fraud committed against the government may, through his own privately retained lawyers, file a law suit to recover the losses caused by the government fraud. The False Claims Act provides huge financial incentives to citizen whistleblowers to retain attorneys and come forward,  prosecute these lawsuits and fight government fraud.

I. HISTORY OF QUI TAM PROVISIONS :

Qui Tam laws have existed for hundreds of years, with roots in England in the middle ages. In qui tam provisions the government gives private citizens the right and the financial incentive to retain a private lawyer to file a lawsuit to act in the place of law enforcement.

The Continental Congress in the early days of government in the United States enacted a number of qui tam provisions. Benjamin Franklin has been quoted as saying: "There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government." Abraham Lincoln, himself a lawyer in private practice before ascending to the Presidency, was responsible for enactment of the 1863 False Claims Act, which was necessary to protect the government from the fraudulent suppliers of faulty war equipment during the Civil War. He stated: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation while patriotic blood is crimsoning the plains of the south and their countrymen are moldering in the dust." Although a significant narrowing of the provisions of the False Claims Act took place in 1943, the law was revitalized by Congress in 1986, with a significant expansion of the scope of the law and renewed attention to the federal whistle-blower and his or her attorney as a key to enforcement.

II. QUI TAM CLAIMS TODAY :

It has been estimated that almost 10% of the United States annual budget is paid to companies or persons who are defrauding the government. Some of them overcharge the government for products sold to the government. Others submit vouchers billing the government for services which they never provided or overbilling for services provided. And still others engage in government contract fraud, defense contractor fraud, Medicare fraud, Medicaid fraud, or other public benefit fraud. The False Claims Act covers a wide variety of situations in addition to overcharging or billing for property or services not delivered. Virtually any situation in which the government has been cheated should be closely scrutinized by experienced Qui Tam lawyers to determine whether it is covered under the False Claims Act. The following are situations in addition to those mentioned above which would be covered under the False Claims Act and for which lawsuits could be brought:

• preparing a false record or statement or bill in order to get a false or fraudulent claim paid by the government.
• conspiring with anyone else to have a false or fraudulent claim paid by the government.
• holding property of the government intending to defraud the government or intending to conceal it from the government.
• creating or delivering a false or fraudulent receipt to the government for its property.
• fraudulently buying property of the government from someone who is not authorized to sell that property for the government.
• making a false statement to fraudulently avoid paying a debt to the government or to avoid delivering property to the government.
• causing someone else to submit a false or fraudulent claim.

The amendments make the definition of fraud broad enough to include submitting claims with deliberate ignorance or reckless disregard for the truth of statements made in the claim for US government spending or funds upon which the fraud claim is based. The burden of proof that must be met by the whistle blower's lawyer or the government's lawyer in a Qui Tam suit is the "preponderance of the evidence" standard, i.e., that the evidence presented by the attorneys is more likely true than not. This is the same burden of proof that ordinarily must be met by the attorney in most civil damage cases, rather than more onerous standards, such as that which must be met by a prosecutor in criminal cases of proof "beyond a reasonable doubt." The 1986 amendments included provisions for requiring the party defrauding the government to pay the successful whistle blower's attorney fees and in some settlements that may mean that the whistle blower never incurs an attorneys fee. In addition, provisions were included for protecting the federal whistle-blower from retaliatory actions by his/her employer.

III. PROCEDURE AND RECOVERY :

This law was designed to encourage private citizens to help fight government fraud by acting as a whistleblower. That is, a person who knows of fraud against the government may retain a lawyer and file a court case (lawsuit) under seal (meaning that it is kept secret during this initial phase) in a United States District Court against the company or person committing the fraud against the government. After the case is filed, the United States attorney investigates the lawsuit and allegations of fraud for sixty days. If the U.S. Attorney believes the fraud lawsuit is meritorious, the United States Government takes over the case and either enters into a settlement or pursues the lawsuit against the wrongdoer. The whistle blower still retains his/her right to a portion of the proceeds in the Qui Tam fraud lawsuit resulting in a successful settlement or recovery, even though the government has taken over the legal case. The government intervenes in approximately 25% to 33% of the cases. If the government does not intervene, the federal whistleblower, through the lawyers he or she has retained, may settle or pursue the lawsuit on his/her own. If the lawyers are successful in proving fraud against the government, the law requires the wrongdoer to pay substantial penalties, which can be assessed to up to 3 times the amount that the wrongdoer fraudulently stole from the government and, in reality, from the taxpayers. In addition, a mandatory civil penalty of between $5,000.00 and $10,000.00 per false claim will be imposed. Out of damages imposed, the private citizen whistle blower (also called a relator) can receive between 10% and 30% of the lawsuit recovery. Some relators have been paid millions of dollars. These cases are often highly technical and complex. Before filing, they must be properly investigated and assembled, which demands that you obtain competent attorneys experienced in handling Qui Tam fraud cases.

Through Ashcraft & Gerel's involvement in federal whistle blower lawsuits our attorneys are well aware of the high degree of discretion necessary in proceeding on such claims. Our lawyers treat each inquiry with the secrecy and sensitivity it deserves. In fact, our Webmaster is an attorney and senior partner in the firm. All inquiries and emails submitted from the web site are reviewed by him, rather than a non attorney staff member. We usually handle Qui Tam lawsuits on a contingency fee basis, meaning that an attorney fee will not be owed unless there is a recovery, and we usually advance any investigation expenses that may be necessary. You can read about contingent fees on our web site by clicking here. Please feel free to contact us by filling out our help form, by email or by telephoning Vincent McKnight in our Washington, D.C. office at 202-783-6400 or toll free, 1-800-725-6470.

For other resources on whistle blowing in the Federal government, see The Whistleblower's Homepage .

*IMPORTANT: It is important to note that there are few instances where any two jurisdictions agree on the law, even where the same law is being interpreted. This document is intended to provide only a very general overview of the law involved in lawsuits under the Federal False Claims Act, and it is not intended to substitute for experienced lawyers or to provide legal advice. It is strongly recommended that anyone not currently represented by an attorney who is reading this page in an effort to understand the law involved in Qui Tam or False Claims Act lawsuits immediately seek experienced attorneys to evaluate, file and pursue any lawsuit that is determined to be meritorious.