The False Claims Act Podcast with John Murphy, Esq.

John Maher: Hi, I’m John Maher. Today, I’m here with attorney John F. Murphy, who is a national whistleblower lawyer. Welcome, John.

John Murphy: Welcome. It’s good to be here, thank you.

John Maher: So let’s start off with a quick question, what is the False Claims Act?

John Murphy: That was an act that was created by Abraham Lincoln way back in the Civil War when he saw that these profiteers were selling sawdust as gunpowder. It’s been on the books for 150, 160 years. It was strengthened in 1986, giving rewards to people who blew the whistle.

The False Claims Act is the formal response of the government and Congress to all of the frauds that were being perpetrated on people with government contracts when they were submitting false claims.

John Maher: Do all whistleblowers fall under the False Claims Act?

John Murphy: No. That’s something that probably ought to be addressed. What it is, whistleblowers cover a wide, wide spectrum of everything. Snowden, who is over in Russia right now, is being labeled a whistleblower, Bradley Manning is called a whistleblower, plus people who live in a town and they’re complaining about something that’s very private to them and they go to the authorities and they blow the whistle.

What it is, the whistleblowing cases I get involved in have to do with specific fraud on the federal government where false claims are submitted to the government for payment.

John Maher: So the False Claims Act is specifically for false claims against the government as opposed to other whistleblowing cases?

John Murphy: That is correct, yeah.

John Maher: If I’m an employee of the federal government, can I file a claim?

John Murphy: No. There’s something in the statute that prohibits you as an employee of the government from filing a claim.

John Maher: What’s a qui tam action?

John Murphy: Qui tam is a Latin phrase, it comes way back in 1700, 1800 in England. It’s a Latin phrase that means “who takes a case in the name of the King.” “Qui tam” literally means “who takes.” So they’ve gotten rid of the rest of the Latin and used “qui tam” to describe false claims cases under the False Claims Act.

John Maher: If I file a qui tam action, how quickly does that get resolved?

John Murphy: It really varies. I tell men and women who I represent that you have to have an incredible amount of patience to finally see the matter that you’ve brought, the case that you’ve brought, the people who you’ve blown the whistle on, be brought to justice.

The period varies over such a long period of time. I had one case where the government was deciding whether it was or not going to intervene, and it took five years to resolve. When you sign up on a false claims case and bring a lawsuit under the False Claims Act, you’re in it for the long haul. It really requires an awful lot of patience on your part, very often.

John Maher: If it takes that long, is it worth filing a claim?

John Murphy: It really depends. I don’t want to scare anyone off with my response. But as I said, you have to have an awful lot of patience. For some whistleblower claimants, for some people who’ve brought these cases under the False Claims Act, they’re rewarded incredibly well with millions and millions of dollars.

Other people who bring cases under the False Claims Act, after going through the process for two, three, four years, the case gets dismissed on a legal technicality filed by the corporate lawyers, and the complainants, the whistleblowers, are left with nothing.

I try to explain this at the outset with clients who come to me and ask me to pursue a case on their behalf, that you have to be aware not only of the benefits — that’s how very often everyone only hears about how much they can make if they blow the whistle — but also on the negative aspects of being a false claims qui tam plaintiff.

John Maher: Is there anything to prevent me from hearing about a fraud that’s happening through the newspaper or from some other source, and then I find out that nobody has filed a qui tam claim in this case, so I file that? Is there something to prevent me from doing that?

John Murphy: Well, yeah. There’s something in the statute. There are two sections of the federal statute, A and B, and either one of them describes what it takes to be an original source. What happens is the statute creates a situation where the case can be dismissed by the court if you are not the original source.

If someone else has told you about the case or someone else has already filed a lawsuit on the same thing that you heard about, or even if you didn’t hear about it from someone, but there, in fact, have been the same claims filed publicly somewhere else, that’s a way where the defendant, the corporation, can have the case dismissed.

You’ve got to be the true original source in order to bring a false claims case.

John Maher: I could understand people being nervous about being a whistleblower and filing a claim because maybe they’re afraid that their boss will find out about it, maybe they’re afraid that they’re going to get fired, but it sounds like it could take years for one of these cases to go through the process. What if I’m afraid about getting fired from my job?

John Murphy: Well, that’s something that we talked about in response to an earlier question about is it worth it? The statute provides protection for whistleblowers who have brought a false claims case. If they’ve disclosed to the government fraud in the submission of claims to the government, then they’re protected against harassment and retaliation.

What happens is when you file a case, initially, it’s filed what they call under seal with the court so that your employer, when it’s first filed, the case is, will not know that they are being investigated by the government for fraud. It’s under seal, and what happens is the government, in deciding whether it wants to take over the case, will get extensions in time on whether or not they want to intervene.

They’ll extend the case for six months while they’re still investigating the claims that you’ve made where they are deciding whether they want to take over the case, and then another extension takes place.

While all of this is going on, under — in theory — your employer will not find out that you are the one who blew the whistle. That looks nice on paper, but very often, when the investigators come to the plant and they’re asking questions about the same thing that you have been raising for the last year and a half at work, your employer might have a pretty good idea that you’re the one who caused the investigators to come.

So on paper, it’s like you’re not known as the whistleblower, and then going down the road, and after the government decides to intervene and take over the case, the case is unsealed, and then the complaint is served on the defendant company. At that time, the company, your employers, will know yes, it’s Charlie who’s been contacting the federal officials. It’s him who’s the whistleblower.

There’s a period of time where on paper, in theory, they’re not supposed to know, but ultimately, after the case is unsealed, you’re known as the one who’s brought this claim.

John Maher: Is there anything then preventing my employer from saying, “OK, Charlie, you’ve been the one who blew the whistle on us, so you’re fired.”

John Murphy: The statute prevents retaliation and harassment, and you can get double the damages if you prove that this is the reason that you’ve been retaliated against, the fact that you went to the federal authorities and brought a false claims case. There are protections built into the statute, again, on paper, that protect you as the whistleblower.

Practically, what happens, you have to be advised as a whistleblower that it doesn’t all turn out so pretty at the end on occasion, that you’ll still change job assignments, you’re given work to do under a supervisor who you blew the whistle on, so all these kinds of things. You have to be aware of before you set out on this long journey as a whistleblower.

John Maher: It could get uncomfortable for you as an employee.

John Murphy: It could. Yes, it could. But the rewards are worth it if you do prevail. So when you’re making the decision, you have to weigh that part of it as well, that you have to ask yourself, “Is it worth it?” I don’t want to sound very negative about this, because whistleblowers have been rewarded considerably well for what they’ve done, but you have to know when you begin this long journey that there are negative parts that might occur as well.

John Maher: You mentioned the rewards. What are the rewards if the government successfully recovers money from a fraud case like this, and how is that amount determined in terms of what you might receive?

John Murphy: That’s a good question. What happens is the statute says that you are entitled, as a whistleblower, to get 15 to 25 percent — it’s on a scale — of the amount of money that the government recovers.

Now, doing the math, who decides the 15 to 25 percent? Initially, it’s the government, and someone in the government from the US Attorney’s office or the Attorney General’s office says, “You didn’t do too much after you blew the whistle and filed the false claims case, so we’re going to give you 15 percent of the proceeds.”

You’re sitting there saying, “Didn’t do too much? I sat in that cubicle for two and a half years, and I was given different job assignments, and I kept on providing you with additional documents.”

If the government decides on the low end of the 15 to 25 percent scale, you can go to court and say to the judge, “Your honor, here’s what I did.” Now the government turns into the enemy — or the adversary, I’d say — at the end when it comes to deciding what your percentage would be.

I also should note that you file the claim with the hopes that the government will intervene and take over the case completely. If the government doesn’t intervene, and you and your lawyer continue with the case, still trying to recover moneys on behalf of the United States of America, your percentage then goes to 25 to 30 percent of what is recovered.

There’s an additional incentive in terms of what the reward is going to be when you continue with the case.

Sometimes the plaintiff and his or her attorney will say, “The government didn’t intervene and we looked at the reasons they gave, and we ought to stop pursuing the case,” talking it over with the client. On the other hand, when you keep on going with the case, file a lawsuit, go through discovery, and do everything without the government’s help, without the United States Attorney or the Attorney General’s office pursuing the case, you’ll be rewarded on a scale of 25 to 30 percent.

John Maher: There’d be an incentive — there’s also an incentive for sticking with your job as opposed to just quitting, blowing the whistle and then leaving, there’d be an incentive for you to stay in your job and maybe try to provide additional information to the government if, in fact, they are pursuing the case, because it could increase the amount of your reward. Would that be true?

John Murphy: No. Well, the government gets pretty uptight. The US Attorney’s office and the Attorney General’s office gets pretty uptight if you, after you’ve brought the case and you’re continuing to gather information, there have been cases that have not allowed that evidence to come in after the lawsuit is brought.

They usually take everything you’ve accumulated before you filed suit, or, I had one case where the whistleblower went out to lunch. After he filed the suit, the whistleblower went out to lunch with his boss, and they wired him. They wired my whistleblower client.

The FBI is sitting three tables away at lunch and taking down all the information that my client is getting from his boss, who instructed him to falsify the claims, the construction claims that were being presented to the government.

It does, on occasion, keep on, the investigation keeps on going, but I’ve had cases as well where the US Attorney has said to me, the Assistant US Attorney, “No, we’d rather go with the information we have right now. We don’t want to get involved with protection orders or anything else that would in some way undercut the value of the case through defense counsel.”

John Maher: That was excellent information, and thanks for speaking with me, John.

John Murphy: Thank you very much, and thank you for the questions.

John Maher: For more information, contact the law office of John F. Murphy at (860) 233-9946, or you can call John’s cell phone number directly at (860) 478-8669, or visit whistleblowerlawyer.com.