What Is the False Claims Act and How Do Qui Tam Lawsuits Work?

The False Claims Act is the federal government’s primary tool for recovering money lost to fraud. Codified at 31 U.S.C. §§ 3729–3733, it makes it illegal to knowingly present, or cause someone else to present, a false or fraudulent claim for payment of government funds. Congress first passed the law in 1863, during the Civil War, to stop suppliers who sold defective or nonexistent goods to the Union Army, which is why it is still called the “Lincoln Law.” More than 160 years later its provisions still apply, and its qui tam mechanism lets a private citizen with knowledge of fraud file a lawsuit on the government’s behalf and share in the recovery. In fiscal year 2025 the Department of Justice recovered a record $6.8 billion under the Act, and whistleblower-filed qui tam cases accounted for more than $5.3 billion of that total.

The explanations below are general information, not legal advice. Individuals who want to know whether their own knowledge could support a case are encouraged to call me, Stephen Teller, at (206) 324-8969 for a free, confidential consultation.

What Does “Qui Tam” Mean?

Qui tam is short for a Latin phrase meaning, roughly, “he who sues on behalf of the king as well as for himself.” In a qui tam lawsuit, a private person, called a relator, sues a wrongdoer on the government’s behalf and shares in any money the government collects. When Congress created the reward in 1863, it originally offered relators up to 50 percent of the recovery to encourage citizens to come forward against war profiteers. The law has changed since then and the qui tam process has become more structured, but the core idea is the same: the False Claims Act is the statute, and qui tam is the mechanism inside it that lets ordinary people enforce the law. A qui tam relator must file a complaint in federal court to be eligible for a reward, because simply reporting the fraud is not enough.

What Counts as a False Claim?

A false claim is any request for government payment that a person knows, or should know, is untrue. Filing a false claim involves making a false or fraudulent claim, or producing a false statement or record to support one. Under the Act, a person can be held liable when they:

• knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval;
• knowingly make or use a false record or statement material to a false or fraudulent claim;
• conspire to commit a violation of the Act;
• knowingly conceal or improperly avoid an obligation to pay money back to the government, known as a reverse false claim; or
• knowingly deliver less government property than certified, or make a false receipt for government property.

The word “knowingly” is defined broadly under 31 U.S.C. § 3729(b) to include actual knowledge, deliberate ignorance, and reckless disregard for the truth. The falsehood must also be material, meaning it was capable of influencing the government’s decision to pay. Honest mistakes and good-faith disagreements are not false claims.

What Types of Fraudulent Conduct Does the False Claims Act Cover?

The Act reaches many forms of conduct, not just billing for nothing at all. Mischarging cases are the most commonly filed, and they involve claims for goods or services that were never provided, such as billing for labor that was not performed, for medical services that were not rendered, or at a physician’s rate for work actually done by a nurse. False certification cases involve certifying compliance with a law, regulation, or contract requirement that was not met. Defective pricing and false negotiation cases involve submitting false cost or pricing data to win or inflate a government contract. Bid rigging, false certifications of compliance with a bidding process, illegal kickbacks, and reverse false claims that hide money owed back to the government are all covered as well.

These schemes appear across many industries, including health care, defense and government contracting, government-funded research grants, education, and customs and import trade. The specific practice areas I handle, with examples of each, are described on my False Claims Act and qui tam lawyer page.

What Penalties and Damages Can a Defendant Face?

A defendant found liable owes three times the government’s actual damages, known as treble damages, plus a separate civil penalty for each individual false claim. The statute sets that penalty at $5,000 to $10,000 per claim, but federal law requires it to be adjusted for inflation, and as of the Department of Justice’s July 2025 adjustment the penalty ranges from $14,308 to $28,619 per claim (31 U.S.C. § 3729(a)). Civil penalties therefore include both fixed fines and treble damages. Because a single scheme can involve thousands of separate claims, the penalties alone can reach into the millions of dollars before damages are added, which is what gives the False Claims Act its deterrent power.

Who Can Be a Whistleblower or Relator Under the False Claims Act?

A relator is the private person who brings a qui tam action. Most relators are insiders with first-hand knowledge, such as employees, former employees, contractors, executives, auditors, and clinicians. A business or corporation can also be a relator, and when several competitors are defrauding the government, more than one qui tam case can be filed. Government employees can serve as relators, but generally only when their knowledge is non-public and was not obtained through their official duties.

Two rules limit who can recover. Under the first-to-file bar (31 U.S.C. § 3730(b)(5)), only the first relator to bring a set of allegations can pursue them; this is often applied claim by claim rather than defendant by defendant, so a later relator raising a genuinely different claim may still have a path to recovery. The public disclosure bar (31 U.S.C. § 3730(e)(4)) can block a case built on information that was already public, unless the relator is an original source of that information. There is no citizenship requirement, so non-citizens and people outside the United States can serve as relators. A person who took part in the fraud may still bring a case, though the reward can be reduced, and someone who planned or led the scheme, or is convicted of the underlying conduct, can be barred.

The Act also protects relators against employer retaliation; those protections, and separate retaliation claims, are covered on my pages about whistleblower protection and illegal retaliation.

How Much Does a Whistleblower Receive?

The relator’s share depends on whether the government joins the case. If the government intervenes and takes over the prosecution, the relator receives between 15 and 25 percent of the recovery (31 U.S.C. § 3730(d)(1)). If the government declines and the relator continues alone, the share rises to between 25 and 30 percent (31 U.S.C. § 3730(d)(2)). A case based mainly on publicly disclosed information may be capped at 10 percent. The Department of Justice weighs a published set of factors, including how much the relator contributed, in setting the exact percentage. Whistleblowers typically receive 15 to 30 percent of the recovered funds, and a successful relator may also recover reasonable attorney’s fees, costs, and expenses from the defendant. The government intervenes in roughly one in four qui tam cases, and although a declined case is harder to win, many are pursued successfully without government involvement.

What Fraud Is Not Covered by the False Claims Act?

The False Claims Act does not cover everything. Tax fraud is the most important exclusion: false tax returns fall under the separate IRS Whistleblower Program, not the False Claims Act. The Act also cannot be used to sue a state or an Indian tribe. And the federal Act reaches only fraud against the federal government, so fraud against a state or local program is pursued under that state’s own law where one exists. Other federal reward programs cover conduct outside the Act, including the Securities and Exchange Commission program for false financial statements and the IRS program for tax fraud. When a matter falls outside the False Claims Act, I can help identify whether one of these other programs may apply.

Does Washington State Have Its Own False Claims Act?

Yes, but it is narrow. Washington’s state law is the Medicaid Fraud False Claims Act, Chapter 74.66 RCW, enacted in 2012. It allows qui tam actions for fraud against the state Medicaid program and is enforced by the Washington Attorney General’s Medicaid Fraud Control Unit. Washington does not have a broader, all-purpose state false claims act, and many other states similarly have Medicaid-specific false claims laws. Fraud against federal programs, such as defense contracting, customs, or federal health care, is pursued under the federal Act no matter which state the whistleblower lives in, which is why I represent relators nationwide from Seattle.

What Is the Deadline to File a Qui Tam Lawsuit?

Under 31 U.S.C. § 3731(b), a qui tam case must be filed within six years of the violation, or within three years after the responsible government official knew or should have known the material facts, whichever is later, but never more than ten years after the violation. Delay can mean that part or all of the fraud can no longer be pursued, so the timing rules alone are a reason to speak with counsel promptly. The steps involved in filing a qui tam lawsuit explain what happens after a case is brought.

Individuals who want to understand whether their knowledge of fraud could support a qui tam case are encouraged to call Teller Law at (206) 324-8969 for a free, confidential consultation, or to read more about working with a False Claims Act and qui tam lawyer.