The False Claims Act invites private-citizen whistleblowers to file lawsuits against companies that they believe are engaging in fraud, waste or abuse in government contracting. When these lawsuits are successful, the whistleblower can receive a substantial portion of the money recovered as a reward for their service. Sometimes, the federal government intervenes in these lawsuits, which does not affect the whistleblower's rights but sometimes improves the lawsuit's chances for success.
Recently, a whistleblower called attention to problems with three major transportation companies that provide shipping services for the Defense Department under contract: YRC Freight, Inc., Roadway Express, Inc., and Yellow Transportation, Inc. He filed a qui tam (whistleblower) lawsuit under the False Claims Act and the government subsequently intervened.
According to the Justice Department, when the three companies weighed shipments, they suppressed the official weights whenever the shipments were lighter than had originally been estimated. By doing so, they knowingly billed the Defense Department and other customers for shipments whose weights had been inflated. The companies are also accused of making false statements in an effort to induce the Defense Department to contract with them and also to avoid their obligation to correct the inflated invoices and repay the overcharges. This went on for seven years.
"Those who do business with the government must do so fairly and honestly," said a spokesperson for the Department of Justice's Civil Division. "Knowingly overcharging the government is an affront to American taxpayers, and the Department of Justice will seek to ensure that those who engage in such misconduct are held accountable."
If the three transportation companies are found to have violated the False Claims Act, they could be liable for triple damages and civil penalties. The whistleblower can expect to receive between 15 and 25 percent of any damages recovered by the government.
If you work for a defense contractor or any company that contracts with the federal government, you may be in a position to blow the whistle on fraud against the government. However, you need to protect yourself against retaliation and ensure that you will receive any monetary award you may be due. Before you take any concrete steps, discuss your situation with a lawyer familiar with whistleblower claims under the False Claims Act.