False Claims Act and Qui Tam Cases in California

False Claims Act and Qui Tam Cases in California

If you’ve witnessed your employer billing the government for services that were never provided, inflating invoices, or misusing public funds, you may be wondering: Can I report this? Could I actually receive a financial reward for doing so?

In many cases, the answers are yes.

Under both the federal False Claims Act and the California False Claims Act, employees who report fraud against government programs may not only be protected from retaliation but also receive a significant percentage of the money recovered. These cases are known as Qui Tam actions, and they have played a major role in uncovering fraud across industries like healthcare, defense contracting, and research.

Let’s take a look at how these laws work to help you recognize whether your situation may qualify and what steps you can take next.

Key Takeaways About False Claims Act and Qui Tam Cases in California

• The False Claims Act allows whistleblowers to report fraud against the government
• Qui tam cases let individuals file claims on behalf of the government
• Whistleblowers may receive 15% to 30% of the amount recovered in successful cases
• Both federal and California laws apply, often simultaneously
• Retaliation against whistleblowers is prohibited
• These cases are complex and require careful legal handling from the start

What Is the False Claims Act?

The False Claims Act is a federal law designed to combat fraud against government programs. It applies when a person or company knowingly submits false or misleading claims for payment to the government.

In simple terms, it targets situations where someone is taking taxpayer money held by a governmental department or division that they are not entitled to receive.

Common Examples of False Claims

False claims can take many forms, including:

• Billing Medicare or Medi-Cal for services that were not provided
• Charging for more expensive services than were actually performed (“upcoding”)
• Submitting false certifications to obtain government contracts
• Misusing federal grant or research funds
• Overcharging the government under procurement contracts

In California, these issues frequently arise in industries with strong government ties, such as healthcare systems, defense contractors, and universities receiving federal funding.

What Is a Qui Tam Case?

A qui tam case is a unique type of lawsuit that allows a private individual, known as a relator, to file a claim on behalf of the government. This means you are not just reporting misconduct, you are helping the government recover money that was paid out for fraudulent claims.

How Qui Tam Cases Work

The qui tam process generally follows these steps:

1. The relator/whistleblower files a lawsuit under seal (confidentially)
2. The government investigates the allegations
3. The government decides whether to intervene (join the case)
4. The case proceeds toward resolution or trial

During the early stages, the case remains sealed, meaning the employer is not immediately notified. This allows the government to investigate without alerting the company.

The Financial Incentive: How Whistleblowers Are Rewarded

One of the most important—and often overlooked—features of False Claims Act and qui tam actions in California whistleblower cases is the potential financial reward. If the case is successful, the whistleblower may receive:

• 15% to 25% of the recovery if the government intervenes
• 25% to 30% if the whistleblower proceeds without government intervention

Given that many of these cases involve large sums of money, the potential recovery can be substantial for the relator who acts as a whistleblower.

Why the Law Includes Financial Rewards

The reward structure is designed to encourage individuals to come forward with insider information that would otherwise be difficult for the government to uncover. Employees are often in the best position to identify fraud, but they may hesitate due to fear of retaliation or career consequences. The financial incentive helps offset those risks.

The California False Claims Act

In addition to the federal law, California has its own version—the California False Claims Act. This law applies to fraud involving California state and local government funds, including programs like Medi-Cal.

How It Differs From Federal Law

While similar in structure, the California False Claims Act:

• Applies specifically to state and local funds
• May be used alongside federal claims in the same case
• Provides its own framework for recovery and enforcement

In many situations, both laws are used together to address different aspects of the same misconduct.

Who Can File a Qui Tam Case?

You do not need to be a high-level executive or insider to bring a qui tam claim. Whistleblowers often include:

• Employees who observe billing practices or internal processes
• Contractors or vendors working with government-funded programs
• Healthcare workers involved in patient care or documentation
• Administrative staff with access to records or communications

The key factor is having non-public information about fraud and sharing it to protect the government from fraud.

What If You Signed an NDA or Confidentiality Agreement?

Many employees worry that reporting fraud could violate confidentiality agreements. However, NDAs generally cannot prevent you from reporting fraud to the government. You may still have the right to:

• Provide information to investigators
• Participate in a qui tam case
• Report misconduct involving public funds

Employers cannot use confidentiality agreements to shield their illegal conduct from scrutiny or prosecution.

Protection From Retaliation

Both the federal and California False Claims Acts include strong anti-retaliation provisions. Employers are prohibited from taking adverse action against employees who:

• Report suspected fraud
• Assist in an investigation
• Participate in a qui tam case

What Retaliation May Look Like

Retaliation can include:

• Termination or demotion
• Reduced pay or hours
• Harassment or hostile treatment
• Exclusion from opportunities or projects

Even subtle changes in treatment may qualify if they are connected to the whistleblower’s actions.

How These Cases Arise in California Workplaces

Qui tam cases often begin with everyday observations that raise questions. For example:

• A nurse notices repeated billing for services that were not provided
• A contractor observes inflated invoices submitted to a government agency
• A researcher identifies misuse of federal grant funds
• An employee sees patterns of false reporting tied to government reimbursements

In Los Angeles and other parts of California, where healthcare systems and government-funded programs are widespread, these issues are particularly relevant.

What Evidence Is Important in a Qui Tam Case?

While you do not need to have every piece of evidence, certain types of information can strengthen a claim. Helpful evidence may include:

• Internal communications about billing or reporting practices
• Documents showing discrepancies or inconsistencies
• Records of services provided versus billed
• Policies or instructions related to the conduct

It is important to handle this information carefully, avoid violating company policies, and preserve what you can. An experienced Los Angeles whistleblower retaliation lawyer can help gather and protect the information that may form the basis of a False Claims Act case, and can also protect your rights during the legal process.

What to Do If You Suspect Government Fraud

If you believe your employer may be committing fraud against the government, it is important to approach the situation carefully. Consider taking these steps:

• Documenting what you have observed
• Preserving relevant communications
• Avoiding discussing the issue widely within the workplace
• Being cautious about taking or sharing sensitive documents
• Work with a dedicated LA employment law lawyer to guide you through the claim

Because qui tam cases are highly technical and must follow specific procedures, early legal guidance can be critical.

Why These Cases Require Careful Timing and Strategy

Unlike other employment claims, qui tam cases involve coordination with government agencies and strict procedural requirements. For example:

• Cases must be filed under seal
• The government must be given time to investigate
• Certain disclosures can affect your eligibility for a reward

Taking action without understanding these requirements can create complications or the loss of your benefits.

What Happens After You File a Qui Tam Case? A Step-by-Step Look

One of the biggest uncertainties for employees considering a False Claims Act qui tam whistleblower case in California is what to expect after the case is filed. Unlike typical lawsuits, qui tam cases follow a unique process that can feel unfamiliar at first. Let’s break it down.

Step 1: The Case Is Filed Under Seal

When a qui tam case is filed, it is placed under seal, meaning it is kept confidential. At this stage:

• Your employer is not notified of the lawsuit
• The case is shared only with the government
• You continue working or transitioning without immediate public exposure

This confidentiality period is designed to protect both the investigation and the whistleblower.

Step 2: The Government Investigates

After filing, government attorneys—often from the U.S. Department of Justice or California Attorney General’s Office—begin investigating the claims. This phase may involve:

• Reviewing documents and internal records
• Interviewing witnesses
• Consulting with industry experts
• Coordinating with regulatory agencies

This stage can take several months or even longer, depending on the complexity of the case.

Step 3: The Government Decides Whether to Intervene

After its investigation, the government will decide whether to intervene, meaning it will take over primary responsibility for the case. There are two possible outcomes:

• Intervention: The government joins the case, which often increases the likelihood of recovery
• Declination: The government declines, but the whistleblower may still proceed independently

Even if the government does not intervene, the case can still proceed, and the individual relator will receive a higher percentage of the award in a successful claim.

Step 4: The Case Becomes Active

Once the seal is lifted, the employer is formally notified, and the case proceeds more like a traditional lawsuit. At this point:

• The defendant employer responds to the allegations
• Evidence is exchanged
• Legal arguments are presented

Many cases are resolved through settlement, but some proceed further depending on the circumstances. 

Step 5: Resolution and Potential Recovery

If the case is successful—whether through settlement or court judgment—the government recovers funds, and the whistleblower may receive a percentage of that recovery. The exact amount depends on factors such as:

• Whether the government intervened
• The strength of the case
• The whistleblower’s contribution to the outcome

Why Understanding the Process Matters

Knowing what to expect can help reduce uncertainty and allow you to make informed decisions about your involvement in these legal processes. Qui tam cases are not quick or simple, but they are structured in a way that:

• Protects whistleblowers early in the process
• Allows the government to investigate thoroughly
• Creates an opportunity for meaningful recovery

Because the process is highly technical, taking the right steps at the outset can significantly impact how the case unfolds.

Why Many Employees Do Not Realize They May Qualify

Many employees who witness fraud do not come forward because they:

• Do not recognize the conduct as fraud
• Assume someone else will report it
• Fear retaliation or career impact
• Are unaware of the available financial incentives

In reality, the law is designed to empower individuals who have inside knowledge of misconduct. Knowing whether your experience falls within these laws can be the first step.

Frequently Asked Questions About False Claims Act Qui Tam Cases

Contact Greenberg Gross to Learn More About Your Options Under the False Claims Act

If you believe your employer may be committing fraud against the government, you may have legal options and potentially a financial incentive to come forward.

At Greenberg Gross, our employment law team works with individuals who are navigating complex whistleblower and retaliation issues, including qui tam actions under federal and California law.

Call (213) 334-7000 for a free consultation to discuss your situation, ask questions, and learn more about your options.