False Claims Act: Qui Tam Lawsuits and Relator Rewards
What the False Claims Act prohibits, how a sealed qui tam lawsuit works, the 15% to 30% whistleblower share, deadlines, and retaliation protection.
The False Claims Act (FCA) makes anyone who knowingly submits a false claim for federal money pay three times the government's losses, plus a penalty for each claim. It also lets a private whistleblower sue for the government in a sealed qui tam case and keep 15% to 30% of what is recovered.
The same law reaches people who improperly avoid paying money they owe the government. It also protects workers who are punished for trying to stop the fraud.
What the False Claims Act Is
The False Claims Act is a federal law that makes knowingly false claims for government money costly and lets private citizens sue to recover that money. The statute's base penalty is $5,000 to $10,000 per false claim, but that range is adjusted for inflation. The current adjusted figures are published in 28 C.F.R. § 85.5.
The law sits at 31 U.S.C. §§ 3729 through 3733. Congress first passed it in 1863 in response to fraud by Civil War contractors, according to the U.S. Department of Justice (DOJ) False Claims Act primer. DOJ reported more than $2.9 billion in FCA settlements and judgments for the fiscal year ending September 30, 2024.
A court may cut damages to double for a violator who reports itself within 30 days and fully cooperates. The FCA does not apply to tax claims under the Internal Revenue Code. If you know about tax fraud, report it to the Internal Revenue Service (IRS) Whistleblower Office instead. The whistleblower settlements guide explains how IRS awards work.
| Provision | What It Says | Citation |
|---|---|---|
| Prohibited conduct | Knowingly presenting a false claim, using a false record, conspiring, or improperly avoiding money owed to the government | 31 U.S.C. § 3729(a)(1) |
| Knowledge standard | Actual knowledge, deliberate ignorance or reckless disregard; no proof of intent to defraud | § 3729(b)(1) |
| Damages and penalties | Three times the government's damages plus a penalty per claim | § 3729(a) |
| Tax exclusion | Does not cover tax claims under the Internal Revenue Code | § 3729(d) |
| Qui tam suits | A private person may sue for the United States, under seal | 31 U.S.C. § 3730(b) |
| Relator share | 15% to 30% of the recovery, plus fees and costs | § 3730(d) |
| Public disclosure bar | Cases based on public allegations are dismissed unless the relator is an original source | § 3730(e)(4) |
| Retaliation | Reinstatement, double back pay and other relief for punished workers | § 3730(h) |
| Statute of limitations | 6 years, or 3 years after the official knew or should have known (whichever is later), capped at 10 years | 31 U.S.C. § 3731(b) |
What Counts as a False Claim
A false claim under the FCA is any knowingly false or fraudulent request for federal money, or a knowing scheme to avoid paying money owed to the government. The statute lists the conduct it covers:
- False claims: knowingly presenting, or causing someone else to present, a false or fraudulent claim for payment. Billing the government for services that were never provided is one example.
- False records: knowingly making or using a false record or statement that is material to a false claim.
- Conspiracy: agreeing with others to do either of the acts above.
- Short deliveries: knowingly delivering less government money or property than is owed.
- Receipts and purchases: certain false receipts, and unlawful purchases of public property.
- Reverse false claims: knowingly using a false record to avoid an obligation to pay the government, or improperly avoiding or reducing that obligation. Keeping an overpayment counts.
"Knowingly" has a set meaning in the law. It covers actual knowledge, deliberate ignorance, or reckless disregard of the truth. The government or relator does not have to prove a specific intent to defraud.
A false statement must also be "material." That means it has a natural tendency to influence payment.
Many states have their own false claims acts covering state funds. The Department of Health and Human Services Office of Inspector General (HHS-OIG) reviews state laws that cover Medicaid, and lists its state false claims act reviews online. For health care billing fraud, see how to report Medicare and Medicaid fraud.
How a Qui Tam Lawsuit Works
A qui tam lawsuit is a case a private person, called the relator, files for themselves and for the United States. It starts in secret. The steps follow the order set in 31 U.S.C. § 3730(b).
- File under seal. The relator files a complaint in federal court. The court keeps it sealed for at least 60 days.
- Disclose the evidence. The relator serves the government with the complaint and a written disclosure of substantially all material evidence.
- Wait during the seal. The defendant is not served until the court orders it. The government may get extensions of the seal for good cause.
- Government decision. The government either intervenes, which means it takes over the case, or declines.
- Relator's choice. If the government declines, the relator may pursue the case on their own.
Two rules can stop a case. The first-to-file rule says that once a qui tam case is filed, no one else may bring a related action based on the same facts. Speed matters for that reason.
The public disclosure bar is the second rule. A court must dismiss a case based on allegations already disclosed in federal hearings, government reports or audits, or the news media. Two exceptions apply: the government opposes dismissal, or the relator is an "original source."
What a Whistleblower Can Recover
A qui tam relator receives 15% to 30% of the government's recovery, and the exact range depends on whether the government takes over the case. The relator also recovers reasonable expenses, attorneys' fees and costs from the defendant.
| Situation | Relator Share | Who Runs the Case |
|---|---|---|
| Government intervenes | 15% to 25% of the recovery | The government |
| Government declines | 25% to 30% of the recovery | The relator |
| Case based mainly on public information | Can be capped at 10% | Depends on the case |
Take a hypothetical $1,000,000 recovery. If the government intervened, 15% to 25% equals $150,000 to $250,000. If it declined and the relator won, 25% to 30% equals $250,000 to $300,000.
Some relators get less. A court can reduce the share of a relator who planned and initiated the fraud. A relator convicted for their role in it gets nothing.
No share is promised. Whistleblower awards are also taxable income, as explained in whether settlements are taxable.
False Claims Act Deadlines
The False Claims Act statute of limitations is 6 years from the violation, or 3 years after the responsible U.S. official knew or should have known the facts, whichever is later. No case may be brought more than 10 years after the violation. The burden of proof is a preponderance of the evidence.
Apply the rule to a violation from 7 years ago. A case on that violation is past the 6-year limit. The case may still be timely if the responsible U.S. official learned the facts within the last 3 years, because 7 years is inside the 10-year cap.
A retaliation claim has its own clock. The suit must be filed within 3 years of the retaliation. Write down the dates of the fraud and of any punishment at work.
Protection from Retaliation
The False Claims Act protects an employee, contractor or agent who is punished for FCA-related acts or for efforts to stop a violation. Covered punishment includes being fired, demoted, suspended, threatened or harassed. Other discrimination counts too.
A worker who proves retaliation is entitled to:
- Reinstatement to the job.
- Two times back pay, plus interest.
- Special damages, including litigation costs and attorneys' fees.
Federal employees who disclose fraud, waste or abuse have a different law. The Whistleblower Protection Act of 1989 covers them, as the USDA Office of Inspector General hotline page notes. Read more on workplace retaliation claims and wrongful termination.
FCA Cases vs the DOJ Fraud Tip Program
An FCA qui tam case pays a percentage of a civil recovery. The DOJ fraud tip program can pay a fixed $10,000 to $30,000 per distinct tip that leads to unsealed criminal charges.
| Feature | False Claims Act Qui Tam | DOJ Tip Rewards Program |
|---|---|---|
| Payment | 15% to 30% of the recovery | $10,000 to $30,000 per distinct tip, paid at or around the time charges are filed and unsealed |
| Lawyer | A sealed federal complaint, which in practice means hiring one | Not required; needed only to stay anonymous |
| Retaliation remedy | A lawsuit under § 3730(h) | Report it to DOJ; the guidance creates no enforceable rights |
DOJ guidance says getting a tip reward does not stop a person from receiving later payments under other government programs. It names DOJ's Corporate Whistleblower Awards Pilot Program as one example. A DOJ tip reward decision cannot be appealed and is not subject to court review.
Reported statements about the tip program differ from DOJ's written rules. AP reported that President Trump described payouts as a "1% commission" on the fraud a tip uncovers. NBC News reported he said he would be the "arbitrator" of award decisions. DOJ's written guidance says awards are $10,000 to $30,000, decided in the Department's sole discretion. That guidance governs submissions, and updates appear on the DOJ Whistleblower Rewards Program page. See the full guide to the Fraud Whistleblower Incentive Program.
When to Hire a Qui Tam Lawyer
Hire a qui tam lawyer as soon as you decide to file. A qui tam case is a sealed complaint in federal court, and the first relator to file blocks related cases. Most whistleblower lawyers work on contingency.
Bring these questions to a first meeting with a False Claims Act attorney:
- Has anything about this fraud appeared in federal hearings, government reports, audits or the news?
- Would I count as an "original source" if it has?
- How do the 6-year, 3-year and 10-year limits apply to my dates?
- Do I also have a retaliation claim, and when does its 3-year clock end?
- Does the fraud involve tax claims, which belong with the IRS instead?
Before the meeting, write down the names, dates and amounts you know about. Note how you learned each fact. The whistleblower claims hub covers other ways to report fraud.
You can describe what you know and get matched with a whistleblower or qui tam lawyer.
Frequently Asked Questions
What is qui tam?
Qui tam is the part of the False Claims Act that lets a private person, called the relator, sue for themselves and the United States. The complaint is filed under seal for at least 60 days and shared with the government. The government then takes over the case or declines, and if it declines, the relator may pursue it.
What is an example of a violation of the False Claims Act?
Knowingly billing the government for services that were never provided is one example. Making a false record to support a claim, conspiring to submit false claims, and knowingly keeping a government overpayment are also violations. The conduct must be knowing, which includes deliberate ignorance or reckless disregard of the truth.
Does the False Claims Act have a statute of limitations?
Yes. A case must be filed within 6 years of the violation, or within 3 years after the responsible U.S. official knew or should have known the facts, whichever is later. No case may be filed more than 10 years after the violation, and retaliation suits must be filed within 3 years of the retaliation.
What is a reverse false claim?
A reverse false claim is knowingly using a false record to avoid paying money owed to the government, or improperly avoiding or reducing that debt. Keeping an overpayment counts. It carries the same liability as a false claim for payment: three times the damages plus a per-claim penalty.
How much does a qui tam relator get?
A relator gets 15% to 25% of the recovery if the government intervenes, and 25% to 30% if it declines and the relator pursues the case. The share can be capped at 10% when the case rests mainly on publicly disclosed information. The relator also recovers reasonable expenses, attorneys' fees and costs from the defendant.
Can I be fired for filing a False Claims Act case?
If you are fired, demoted, threatened or harassed for FCA-related acts, the False Claims Act entitles you to reinstatement, two times back pay, interest, costs and attorneys' fees. That suit must be filed within 3 years of the retaliation.
Do I need a lawyer to file a qui tam lawsuit?
In practice, yes, because a qui tam case is a sealed complaint filed in federal court. Most whistleblower lawyers work on contingency. The separate DOJ fraud tip program does not require a lawyer, but its reward is limited to a fixed $10,000 to $30,000 per tip instead of a percentage.
Not sure where you stand?
Check your eligibility in under 2 minutes — free, private, and no commitment required.