What Is “Qui Tam”? Understanding the Federal False Claims Act and Whistleblower Rewards
Many people are shocked to learn this exists: private individuals can help the federal government recover fraud—and legally receive a share of the recovery.
That process is called qui tam, and it is one of the most powerful tools the federal government has to uncover fraud involving taxpayer dollars.
What Does “Qui Tam” Mean?
Qui tam comes from a Latin phrase meaning:
“He who brings the action for the king as well as for himself.”
In modern law, it allows a private whistleblower (called a “relator”) to file a lawsuit on behalf of the United States against individuals or companies that defraud the federal government.
These lawsuits are authorized under the Federal False Claims Act (FCA).
The Federal False Claims Act (31 U.S.C. §§ 3729–3733)
The Federal False Claims Act, originally enacted during the Civil War and significantly strengthened in 1986, targets fraud involving federal funds and programs.
It applies nationwide and covers fraud involving:
- Federal healthcare programs (Medicare, Medicaid, Tricare)
- Defense and military contracts
- Federal grants and research funding
- Disaster relief funds
- Federal procurement and government contracts
The FCA is the primary reason the U.S. government recovers billions of dollars each year from fraud.
Common Types of Fraud Reported Under the Federal FCA
Most successful qui tam cases are brought by insiders—employees, contractors, or business partners—who see misconduct firsthand.
- Healthcare Fraud
- Billing for services never provided
- Upcoding or unbundling procedures
- Submitting false diagnoses
- Paying or receiving illegal kickbacks
Healthcare fraud is consistently the largest source of FCA recoveries nationwide.
- Government Contractor Fraud
- Inflating labor hours or costs
- Using substandard or non-compliant materials
- Charging for work outside contract terms
- Falsifying certifications or compliance reports
- Grant & Research Fraud
- Misrepresenting data to obtain federal grants
- Diverting grant money for unauthorized purposes
- False reporting to maintain eligibility
- Procurement & Bid-Rigging
- Collusive bidding on federal contracts
- Providing defective products to federal agencies
- Concealing conflicts of interest
- “Reverse” False Claims
- Knowingly avoiding payments owed to the government
- Underreporting royalties, customs duties, or fees
- Improperly retaining overpayments
How Federal Qui Tam Cases Are Filed: “Under Seal”
Federal qui tam cases follow a strict and confidential process designed to protect whistleblowers and preserve evidence.
- Filing Under Seal
The lawsuit is filed in federal court under seal, meaning:
- The defendant is not notified
- The case is not public
- Only the Department of Justice (DOJ) sees the complaint
- DOJ Investigation
The U.S. Department of Justice investigates the claims, often working with:
- FBI
- HHS Office of Inspector General
- Department of Defense investigators
- Other federal agencies
Although the statute provides a 60-day review period, investigations are frequently extended for many months or longer.
- Government Intervention Decision
After investigating, the DOJ decides whether to:
- Intervene and take over the case, or
- Decline, allowing the whistleblower to proceed independently
Both outcomes can still lead to substantial recoveries.
Federal Whistleblower Rewards
Under the Federal False Claims Act, whistleblowers are entitled by law to a portion of the recovery:
- 15%–25% if the government intervenes
- 25%–30% if the whistleblower proceeds independently
Recoveries can range from thousands to hundreds of millions—or more—depending on the fraud uncovered.
Since 1986, FCA cases have returned tens of billions of dollars to U.S. taxpayers.
Federal Protections Against Retaliation
The FCA includes strong anti-retaliation provisions. Employers may not retaliate against whistleblowers for lawful actions taken under the Act.
Protected individuals may recover:
- Reinstatement
- Double back pay
- Compensation for emotional distress
- Attorney’s fees and costs
Retaliation itself can become a separate federal violation.
Why Early Legal Guidance Is Critical
Federal qui tam cases are complex and unforgiving. Errors—such as disclosing information improperly or missing statutory requirements—can permanently bar a claim.
An experienced attorney can:
- Determine whether your information qualifies
- Ensure compliance with federal filing rules
- Preserve anonymity where possible
- Coordinate with federal investigators
- Protect against retaliation
- Maximize potential recovery
Speak Confidentially With Strom Law Firm
If you have information about fraud involving federal taxpayer funds, you may have both a legal obligation—and a legal right—to report it properly.
Consultations are confidential, and early legal advice can make the difference between a successful claim and a lost opportunity.
🔒 Discreet whistleblower consultations: 803-252-4800
⚖️ Federal False Claims Act guidance
🔗 Learn more at stromlaw.com
Sources & Legal Authority
- 31 U.S.C. §§ 3729–3733 — Federal False Claims Act
- U.S. Department of Justice, Civil Fraud Section — False Claims Act Enforcement Reports
- U.S. Department of Justice Annual FCA Statistics
- HHS Office of Inspector General — Healthcare Fraud Enforcement Data
- Congressional Research Service (CRS) — Overview of the False Claims Act
This article is for informational purposes only and does not constitute legal advice.