By Eileen K. Leslie, CPA, CFE
January 28th, 2017
The Department of Justice recovered in excess of $4.7 billion in settlements and judgments from civil cases of fraud and false claims against the government in fiscal year 2016, which ended in September. Some $2.9 billion of that figure came from lawsuits filed under qui tam provisions of the False Claims Act (FCA), according to an agency news release.
Billions of dollars in FCA whistleblower settlements represent just the tip of the iceberg, however. For every successful whistleblower case that results in an award to a whistleblower and their relator counsel, there may be 10 or more whistleblower cases that failed for various reasons.
While working as financial analyst at the U.S. Attorney’s Office, I acted as the government’s financial and investigative expert. My primary responsibility was to identify the facts, investigate the allegations, perform forensic financial analysis as necessary and calculate damages on civil False Claims Act (FCA) cases including those cases initiated by governmental agencies.
I have seen first-hand common reasons for lack of government intervention in a whistleblower case, which often include the following:
• Lack of relator credibility
• Insufficient or immaterial evidence
• Case not organized and/or presented effectively
• Allegations involving “he said -she said” accusations that are difficult to prove
• Limited government resources which are better devoted to larger or stronger cases
If there are weaknesses in the case, it is advantageous for the relator and relator’s counsel to know this from the outset so that they can be addressed.
Focusing on the fraud identification and detection aspects of a case early can help to ascertain the validity of the fraud allegations and explore reasonable damage calculation methodologies. A solid understanding of alleged violations and the potential damages, packaged in a credible and organized format, can encourage the government to pursue a course of intervention.
This article examines how the whistleblower and their counsel can increase both the likelihood of government intervention and the chance for success if the government declines to participate.
When a relator’s whistleblower case is first filed, the government has 60 days to review the case and make a decision about whether or not to join (or “intervene” in) the case. During this review period the whistleblower complaint and all related filings are under seal, meaning the case and any documents are granted confidential treatment. The identity of the whistleblower, the defendant, and the allegations are known only to the Department of Justice, the U.S. Attorney, and the assigned District Court judge while the case is under review. Despite the 60-day review deadline, the government often imposes one or more extensions of up to six months each.
In many instances, the relator and their counsel will meet with Department of Justice officials and the relevant agency representative (for example, the Centers for Medicare & Medicaid Services in the event of alleged Medicare fraud) to present the whistleblower case. This is done so the government can, amongst other reasons, assess the credibility of the relator and learn the allegations presented in the matter.
In qui tam actions, the government chooses to intervene or not once the initial case review is completed.
If the government decides to intervene, it takes over the lead role in the investigation. The relator continues to provide support in the matter, but may not be privy to the on-going details of the government’s investigation.
There are several options available to the relator and their counsel if the Department of Justice declines to intervene in a case.
First, the parties can, and should, request clarification about why the government declined to intervene in the matter. Information obtained during this post-review meeting can play a critical role in the ultimate outcome of the case.
I strongly recommend listening to the government’s feedback before reassessing the case.
The government often decides not to intervene in a whistleblower case when they determine that the facts on which the allegations are based are not properly vetted, prepared or presented.
If the basis for the government’s decision not to intervene is insufficient evidence, then the relator might consider gathering more evidence if warranted and available. If the relator is working with a qui tam attorney, counsel can advise the relator as to their options in regard to pursuing a case independently.
As part of the reassessment process between the relator and relator’s counsel, all options to advance or close the case should be discussed.
If the government ultimately does decline to intervene, the relator can move forward with the lawsuit on their own. The seal is generally lifted on the case once the whistleblower proceeds with the case independently, meaning that the relator’s name becomes public. The defendant is also identified, as are the allegations of wrongdoing brought by the whistleblower.
A well-prepared case that is clearly presented and outlines the facts derived from a strong investigative and financial analysis will strengthen the likelihood for success in a False Claims Act dispute.
Contact Ms. Leslie at 205-660-0322 or email to discuss a potential whistleblower case or other fraud matter.
About Investigative CPA, LLC
Investigative CPA, LLC (www.investigativecpa.com), founded by Eileen K. Leslie, specializes in False Claims Act (FCA) investigations on a national basis.
Ms. Leslie is a Certified Public Accountant (CPA, 2004), a Certified Fraud Examiner (CFE, 2007), and holds a Master of Taxation (2003). She worked for the Department of Justice in both the United States Attorney’s Office (2010 to 2014) and the Federal Bureau of Investigation (FBI, 2004 to 2007). Additionally, she has held positions in public, private and forensic accounting firms. She is also a proud United States Air Force veteran.
She works closely with qui tam attorneys and government agencies nationwide to investigate FCA claims, uncover fraud, calculate damages, and provide forensic financial consulting services. She strives to achieve maximum recovery of damages to the government and other injured parties, when appropriate.
Beyond FCA investigations, Ms. Leslie has performed a variety of criminal fraud investigations and non-government civil fraud examinations and fraud assessments. She has also investigated violations of the Anti-Kickback statute and the Stark Law.
Contact Ms. Leslie at 303-870-0625 or firstname.lastname@example.org to discuss a potential whistleblower case or other fraud matter.
This article is provided for educational purposes only. It is not intended to provide legal advice or an opinion in regard to any topic discussed. The blog should not be used as a substitute for legal advice from a licensed attorney in your state.
Material for this article was taken from a collection of industry sources relating to the subject. Every case is different and circumstances vary widely depending on the governing state or federal law, policy provisions, and related considerations