ATTORNEY NEWSLETTER
Failure To Comply With Government Regulations Alleged
Whistleblower To Receive $850,000 Reward
How Whistleblower Cases Work
Government contracts often include strict rules regarding product specifications which contractors are obligated to meet in order to qualify for payment. Knowing failure to fulfill contractual obligations or falsely representing compliance with government regulations may violate the False Claims Act. See False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq. Contractors may knowingly misrepresent compliance with regulatory requirements, fail to test, or deviate from the specifications for finished goods in order to reduce costs and increase profits on the contracted job. Individuals with knowledge of this kind of fraud, often employees or former employees of the offending contractor, may bring an action (called a “qui tam” case) on behalf of the government for the fraud perpetrated against the government. Rewards for the individuals (referred to as “relators”) bringing the actions can equal 15-30% of the amount recovered. 31 U.S.C. § 3730(d). If you have credible information for a false claims whistleblower case on behalf of the federal government in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Settlement*
The U.S. Department of Justice (DOJ) recently announced a qui tam FCA settlement of $4.6 million with a defense contractor resolving whistleblower allegations that they failed to comply with cybersecurity contracts with the Army and Air Force. The settlement stems from a qui tam lawsuit filed by a whistleblower. In this case, the whistleblower was awarded 18.5% of the settlement amount, totaling $851,000.
Leah B. Foley, the U.S. Attorney handling the case, commented, “Federal contractors must fulfill their obligations to protect sensitive government information from cyber threats.” She also noted that the DOJ will “continue to hold contractors to their commitments to follow cybersecurity standards to ensure that federal agencies and taxpayers get what they paid for, and make sure that contractors who follow the rules are not at a competitive disadvantage.”
This settlement reflects the DOJ’s increased focus on cybersecurity violations of FCA over the last years. In 2021, they announced the Civil Cyber Fraud Initiative “to combat new and emerging cyber threats to the security” of sensitive American systems. The Initiative utilizes the FCA and its qui tam provision to address cybersecurity fraud by government contractors, such as the alleged fraud by [defendant]: “The False Claims Act is the government’s primary civil tool to redress false claims for federal funds and property involving government programs and operations,” the announcement read. The target corporations for these actions are ones that knowingly provide inadequate cybersecurity services, misrepresent cybersecurity protocols, or fail to monitor and report breaches in cybersecurity.
Starting A Qui Tam Action
Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
*Evans Law Firm, Inc. was not involved in the case in any way.
