From 2008 to 2013, the federal government collected nearly $17 billion in judgments from actions brought under the False Claims Act (FCA), collecting a staggering $3.8 billion this past year alone.1 Most FCA actions are filed under the FCA’s qui tam provision which allows private citizens, referred to as “relators,” to file lawsuits on behalf of the government alleging fraud. If the relator pursues the action alone and prevails, the relator receives up to 30 percent of the recovery. If the government intervenes and prevails in the action, the relator receives up to 25 percent of the recovery. See 31 U.S.C. §3730(d). In its report, the U.S. Department of Justice disclosed that $2.9 billion of the $3.8 billion recovered last year emanated from lawsuits filed under the qui tam provision of the act, with whistleblowers recovering $345 million.

Imagine you are a manager at ABC Company and you learn from a fellow manager that your subordinate has voiced concerns to other employees that the company is promoting its new product for uses not approved by the federal regulatory authorities. In addition, your subordinate is concerned that the lavish dinners your company hosts for customer representatives may be designed to induce the customer’s vendors to sell more of ABC Company’s products. Your subordinate is concerned that these actions may violate federal laws and is considering reporting the concern to an outside agency. What do you do?

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