Companies that do business with federal and state governments sometimes become the targets of civil allegations that they submitted false claims for payment to the government. The federal False Claims Act and its state equivalents were designed to combat fraud against the government, and designed as an enforcement mechanism to empower private individuals with knowledge of fraud against the government to file qui tam actions on the government’s behalf.
While false claims litigation varies widely in subject matter and theory, typical claims include allegations that a contractor mischarged the government for goods and services, fraudulently induced a government contract, or falsely certified compliance with regulatory requirements. The incentive offered to qui tam plaintiffs is a percentage of any recovery the government makes, which can include hefty civil penalties and treble damages.
Our GRCI attorneys have extensive experience defending qui tam actions across a broad range of industries that do business directly with the government or participate in government-funded programs. These include government contractors, defense contractors, oil and gas companies, transportation companies, hospitals, healthcare providers, pharmaceutical companies, and financial services companies. The majority of federal qui tam actions relate to alleged healthcare and procurement fraud, both of which are fields in which McGuireWoods has significant litigation experience.
We have extensive experience in all phases of qui tam litigation. For example, one of the crucial moments in any qui tam case is when the government decides whether or not to intervene. In cases where the government declines to intervene, then less than 10 percent of federal qui tam cases result in a recovery to the government. The median recovery is significantly smaller than cases where the government conducts the litigation itself.
While qui tam actions are filed under seal, companies will often learn of the case prior to the government’s election whether or not to intervene. This presents companies with an important advocacy opportunity at an early stage in the litigation, potentially including a presentation to the government explaining why it should not intervene. We have had significant success in not only making precisely this type of presentation to the government, but also in preventing government intervention.
Our team includes former federal prosecutors, and experienced civil and white collar criminal litigators with experience in this unique area of law. We also tap attorneys from the firm’s other practice groups and our subsidiary McGuireWoods Consulting LLC, when it is beneficial for clients.