False Claims Act Qui Tam Suits

Reviewed by Bram Whitfield (BW), Editor-in-Chief — Whistleblower Award Programs Practice. Updated May 2026.

The False Claims Act (FCA), 31 U.S.C. §§ 3729–3733, is the federal government's primary tool for recovering funds obtained through fraud against the government. Its qui tam provisions allow private individuals to file lawsuits on the government's behalf and share in any recovery. Since Congress strengthened the FCA in 1986 with the False Claims Amendments Act, the government has recovered over $75 billion under the statute — the majority through qui tam suits filed by private whistleblowers. Understanding how qui tam suits work, how the government's intervention decision affects your award, and what types of fraud the FCA covers is essential for anyone considering an FCA claim.

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, 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 relator's allegations, the Department of Justice makes the intervention decision: the government either "intervenes" (takes over the case and prosecutes it with DOJ resources) or "declines" (allows the relator to proceed on the government's behalf without DOJ participation). This decision has significant practical and financial consequences:

• 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

The FCA's damages structure is what makes large FCA cases so valuable. The statute imposes: (1) treble damages — three times the government's actual financial loss (not merely single damages as in typical civil cases); and (2) civil penalties per false claim, which as of recent inflation adjustments range from approximately $13,000 to $26,000 per each individual false claim submitted. In a healthcare fraud case where a provider submitted millions of false claims over several years, the civil penalty component alone can reach into the tens of millions of dollars before treble damages are applied. This structure means that the total recovery in large FCA cases can far exceed the government's actual loss — creating a strong deterrent and generating large relator awards even after the government takes its share.

Major FCA Fraud Categories

Healthcare fraud generates the majority of FCA recoveries annually. Common schemes include: pharmaceutical companies paying kickbacks to physicians for prescribing their drugs in violation of the Anti-Kickback Statute; 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 to collect hospice reimbursement rates. DOJ has recovered tens of billions of dollars in healthcare fraud recoveries under the FCA since 1986.

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 FCA contains a "first-to-file" bar at 31 U.S.C. § 3730(b)(5): a qui tam action may not be filed based on the same allegations as a pending action. This means that if someone else has already filed a sealed qui tam complaint about the same scheme, a later relator with overlapping information will be barred from recovering. The first-to-file rule makes timing critically important in FCA cases, just as submission date matters in SEC cases. Filing a preliminary complaint to establish your place in the queue is one reason FCA attorneys move quickly to file even before all evidence has been gathered.

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