THE VIRGINIA FRAUD AGAINST TAXPAYERS ACT
QUESTIONS & ANSWERS
- What is the Virginia Fraud Against Taxpayers Act (FATA)?
- What does qui tam mean?
- What types of conduct or activities are covered under the FATA?
- How can a person receive a reward under the FATA?
- How much money can a person receive for filing a complaint?
- What is the liability for violating the FATA?
- Who can be held liable?
- Is there a deadline for filing a complaint?
- How much does it cost to file and pursue a complaint?
- How long does each case take?
- Have I lost my right to file a complaint if I have already informed the Commonwealth about the fraud?
- Can I keep my identity secret if I file a complaint?
- Do I have any protection against my employer firing me for exposing fraud which my employer committed against the Commonwealth?
- Does the FATA apply to frauds committed against the Federal Government?
- How do I find out more?
What is the Virginia Fraud Against Taxpayers Act?
The Virginia Fraud Against Taxpayers Act is a law which empowers people with evidence of fraud against the Commonwealth to file a complaint to recover triple the amount which has been defrauded from the Commonwealth, and to receive a monetary reward for doing so.
The law applies to cases where someone has committed a fraud against:
(a) The Commonwealth of Virginia, or
(b) any agency of the State government, or
(c) any political subdivision of the Commonwealth
As compensation for their efforts, a person who files such a complaint, (known as the “Relator”) can receive a monetary award, typically between 15% and 50% of the total amounts recovered by, or for, the Commonwealth.
The term “qui tam” stands for a longer Latin phrase [qui tam pro domino rege quam pro se ipso in hac parte sequiter] that is translated as “he who brings an action for the king as well as for himself.” Qui tam is the technical legal term for the legal principal which allows individuals who have evidence of fraud to sue the wrongdoer on behalf of the Commonwealth.
What types of conduct or activities are covered under the Act?
Virtually any situation within which the Commonwealth is dispensing money, or collecting money, can give rise to a FATA violation. Activities which constitute a violation under the Act are:
(a) knowingly presenting, or causing to be presented, a false claim for payment or approval by an agent or employee of the Commonwealth;
(b) knowingly making, using, or causing to be made or used, a false record or statement to get a false claim paid or approved by the Commonwealth;
(c) conspiring with others to get a false or fraudulent claim allowed or paid by the Commonwealth;
(d) having possession, custody or control of property or money used, or to be used, directly or indirectly, by the Commonwealth and, intending to defraud the Commonwealth or willfully conceal the property or money, delivers or causes to be delivered, less property or money than the amount for which the person receives a certificate or receipt;
(e) knowingly buying, or receiving as a pledge of an obligation or debt, public property from an officer or employee of the Commonwealth, knowing that such officer or employee lawfully may not sell or pledge the property;
(f) knowingly making, using, or causing to be made or used, a false record or statement to conceal, avoid or decrease, directly or indirectly, an obligation to pay or transmit money or property to the Commonwealth;
How can a person receive a reward under the Act?
In short, it is only the filing of a qui tam lawsuit and subsequent settlement or favorable judgment which enable a private party to receive a recovery under the Fraud Against Taxpayers Act.
How much money can a person receive for filing a complaint under the Act?
There is no limit upon the actual dollar amount which can be awarded to a Relator.
The highest reward paid under the Federal False Claims Act, upon which the Virginia Act was modeled, was over one hundred fifty million dollars ($150,000,000.00).
The person who files the complaint, known as the “Relator” typically receives between 15% and 30% of the total recovery from the defendant, whether through a favorable judgment or settlement.
If a person brings a qui tam action, and the Commonwealth chooses to intervene by taking over the lawsuit, the Relator generally is eligible to receive between 15% and 25% of the recovery as a reward.
If a person brings a qui tam action, and the Commonwealth chooses not to intervene, the Relator may be permitted to proceed without the Commonwealth and can receive between 25% and 30% of the recovery as a reward.
What is the liability for violating the Act?
Violators of the Fraud Against Taxpayers Act are liable for three (3) times the amount of damages the Commonwealth sustained as a result of the fraud, plus civil penalties of up to $10,000 for each false claim submitted to the Commonwealth.
Virtually anyone who receives money from the Commonwealth, pays money to the Commonwealth, or helps someone else get money from the Commonwealth, can engage in conduct which would make them liable for a violation of the Fraud Against Taxpayers Act.
Common examples of defendants in qui tam actions, include the following:
Individuals and Businesses: Virtually any individual or business who does business with the Commonwealth, sells something to the Commonwealth, or any agency or branch thereof, can be a defendant in a complaint under the Fraud Against Taxpayers Act.
Commonwealth Contractors and Subcontractors: Anyone who contracts to provide services or goods to the Commonwealth can be a defendant for a vast array of complaints.
Medical Providers: Doctors, hospitals, HMO’s and clinics are often defendants in qui tam actions, for Medicaid or Medicare fraud and a wide range of fraudulent billing practices which can range from charging for services not performed, to performing services which were unnecessary.
Local Government Agencies and Officials: Because they are recipients of large amounts of Commonwealth money, local government entities can be defendants in qui tam actions.
Private Universities: Private universities and colleges have been charged as defendants in qui tam actions that involve their handling of grants and research and development money.
Is there a deadline for filing a complaint under the Act?
Under the Act, a complaint must be filed within six (6) years from the date of the violation of the Act, or within three (3) years after the Commonwealth should have learned about the violation, whichever period would be longer, up to a maximum period of ten (10) years.
Please Note - if, before you file, someone else files a complaint under the Act or helps publicize allegations similar to yours, you may lose your right to file a complaint.
How much does it cost to file and pursue a complaint?
Most law firms who are experienced in these cases work on a contingency fee basis.
This means that you pay no out-of-pocket legal fees. The lawyers get paid if, and only if, your claim results in a monetary award or settlement, from which the lawyers get a percentage for their fees.
For more information, call (516) 746-1600
The time from the filing of a complaint until its resolution can vary greatly from case to case, and can range from months to years.
Have I lost my right to file a complaint if I have already informed the Commonwealth about the fraud?
As a general rule, you do not give up your right to file a complaint by going to the Commonwealth before filing your complaint.
However, no person can file a complaint to expose allegations which are already the subject of any pending criminal or civil action or proceeding, or any administrative action within which the Commonwealth is already a party.
Can I keep my identity secret if I file a complaint?
It is possible, but unlikely, that you will be able to keep your identity a secret if you file a complaint under the Act.
Do I have any protection against my employer firing me for exposing fraud which my employer committed against the Commonwealth?
Yes. Under the Fraud Against Taxpayers Act, any employee who is discharged, demoted, harassed or otherwise discriminated against because of lawful acts of the employee in furtherance of an action under the Act is entitled to receive all relief necessary to make the employee whole.
Such relief may include reinstatement with full benefits and seniority, double back pay plus interest, plus additional compensation for any special damages including litigation costs and attorneys fees.
Does the Virginia Fraud Against Taxpayers Act apply to frauds committed against the Federal Government?
No. There is a separate Federal False Claims Act which covers frauds against the Federal Government. To learn about exposing fraud against the Federal Government, go to FederalFraud.com, or call Campanelli & Associates, P.C. at (516) 746-1600.
To obtain more information, contact:
Andrew J. Campanelli
Campanelli & Associates, P.C.
623 Stewart Avenue
Suite 203
Garden City, NY 11530
(516) 746-1600
For information about actual cases, go to the NEWS section of this web site.