False Claims Act Qui Tam Suits

Published by The Click Lab Agency LLC. Last reviewed September 2026. Not legal advice.

The False Claims Act, 31 U.S.C. §§3729–3733, is the federal government's primary civil statute for recovering money paid out because of fraud. Its qui tam provisions, in §3730, let a private person file suit in the name of the United States and take a share of what is recovered. The Department of Justice reports that recoveries since the 1986 amendments exceed $75 billion, most of it from qui tam cases. If that page shows a newer total, use the page. What follows is the procedure: the seal, the intervention decision, and the two award bands.

What Is a Qui Tam Suit?

A qui tam suit is a civil lawsuit in which a private individual — called the "relator" — files on behalf of the United States government against a party that has submitted false claims to the government for payment. The phrase "qui tam" derives from the Latin "qui tam pro domino rege quam pro se ipso in hac parte sequitur" — "who sues as well for the king as for himself." The relator is not merely an informant; they are a party to the litigation with standing to pursue the case in court, including when the government declines to participate.

This structure makes the FCA fundamentally different from the SEC and IRS programs: in those programs, the whistleblower provides information and the agency decides whether and how to pursue enforcement. In an FCA qui tam case, the relator's attorney files suit and drives the litigation if the government declines to intervene. The relator's recovery depends on the success of the lawsuit itself, not just on whether the government chooses to investigate.

Filing Under Seal

FCA qui tam complaints must be filed in federal district court under seal, meaning the complaint is not served on the defendant and is not publicly disclosed during the government's investigation period. The government receives the complaint and supporting evidence and conducts its own investigation before deciding whether to intervene. The initial seal period is 60 days under 31 U.S.C. §3730(b)(2), but courts routinely extend the seal at the government's request — seal periods of one to three years are common in complex cases, and some have lasted much longer. During the seal period, the defendant has no notice of the lawsuit, and the relator's identity is protected.

Because qui tam complaints are filed in federal court, an attorney is a practical necessity — not just recommended. The relator must have legal representation to file and prosecute the case. Whistleblower attorneys who specialize in FCA cases typically work on contingency, taking a percentage of the recovery if the case succeeds. They absorb the costs and labor of developing and prosecuting the case in exchange for their share of the relator's award.

The Government's Intervention Decision

After investigating, the Department of Justice either intervenes and takes the case, or declines and leaves the relator to litigate in the government's name. Section 3730(d) ties the share to that choice:

• Government intervenes: The relator receives 15%–25% of the government's recovery. The case is prosecuted by DOJ with substantially more resources and credibility than a private relator alone. Government-intervened cases settle or succeed at a much higher rate and typically produce larger absolute recoveries.
• Government declines: The relator receives 25%–30% of any recovery, but must prosecute the case without DOJ support. The higher award percentage partially compensates for the greater risk and effort. Declined cases are harder to win and more expensive to prosecute, but successful relator-only cases do occur — particularly where the evidence is strong and the relator's attorney is well-resourced.

The government's intervention rate varies by case type and quality of evidence. Healthcare fraud cases with strong documentary evidence and cooperating witnesses have historically been the most likely to attract government intervention. Complex securities or banking fraud with highly technical facts may be declined even if the underlying fraud is real, simply due to the government's resource constraints.

FCA Damages Structure

Two features of 31 U.S.C. §3729(a) drive the size of a recovery. The statute imposes treble damages, three times the government's loss, rather than single damages. It also imposes a civil penalty on each false claim. Congress set a base range and required inflation adjustments, so a dollar figure printed on this page would go stale. Read the current penalty in the statute and the latest adjustment before multiplying it by a claim count. Where the number of claims is large, the penalty component can exceed the loss. The relator's percentage is taken from the recovery, which includes both.

Major FCA Fraud Categories

Healthcare fraud generates the majority of FCA recoveries. Common schemes include: pharmaceutical companies paying physicians to prescribe their drugs, in violation of the Anti-Kickback Statute, 42 U.S.C. §1320a-7b; hospitals billing Medicare and Medicaid for services not rendered, for inflated diagnostic codes (upcoding), or for medically unnecessary procedures; durable medical equipment suppliers billing for equipment that was never provided; and hospice companies enrolling patients who were not terminally ill. DOJ's False Claims Act statistics, linked above, break healthcare out from other fraud. Use those figures rather than a round number from this page.

Defense contractor fraud includes overbilling for labor and materials on government contracts, billing for goods not delivered or services not performed, cost misallocation between government and commercial contracts, and defective pricing (providing inaccurate certified cost data to obtain inflated contract prices). Defense fraud cases often involve classified contracts and specialized technical issues that require contractors with inside knowledge to expose.

Grant fraud involves misrepresenting how federal grant funds are used: diverting grant money to personal expenses, double-billing grants from multiple agencies for the same work, fabricating research data in federally-funded research, and falsely certifying compliance with grant conditions. Universities and research institutions have been defendants in significant FCA grant fraud cases.

The First-to-File Rule

The first-to-file bar is 31 U.S.C. §3730(b)(5): when a qui tam action is already pending, no person other than the government may intervene or bring a related action based on the facts underlying the pending action. A later relator with overlapping allegations does not get a share of that case. The bar is why timing matters in a way that is harsher than the SEC's submission-date practice. There is no SEC-style supplement that revives a second complaint about the same scheme. Lawyers file promptly, sometimes before every document is in hand, because a sealed complaint already on file can end a later one.

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