Relator Shares May Still be Viable after Company Self-Reports

After learning that their employers have supposedly self-disclosed fraud to the Government, would-be whistleblowers may believe that their potential qui tam actions are somehow barred simply because the potential False Claims Act (FCA) defendant has alerted the government.

Even if they do, however, their disclosures frequently leave out salient, culpable facts. Indeed, Congress carefully crafted the FCA to encourage employees to step forward in such instances, for these individuals can further flesh out these partial disclosures.

For example, a relator recently received a 28% relator share, worth $2.3 million, from a settled qui tam action filed weeks after his employer disclosed wrongdoing to the Government.

Of particular note, the settlement agreement revealed that a spreadsheet identifying the violative products had been produced by the company only after the relator proceeded with the lawsuit post-declination.

In other recent qui tam actions, relators have greatly strengthened an existing Government investigation that was mired in seemingly innocuous corporate disclosures. Other relators have placed the Government on the correct trail of fraud after the corporate disclosures led investigators astray. Thus, relators still play an important role in uncovering fraud, even if their employers may have reported wrongdoing to the Government.

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