Boston Injury Lawyer Blog
In 1994 the seven CEOs of the major American tobacco companies testified before Congress that nicotine was not addictive. Two years later, VP for research and development at the Brown & Williamson tobacco company Jeffrey Wigand came forward, and reported that his employer knowingly doctored the nicotine content, adding toxic substances such as ammonia, in its cigarettes to enhance its addictive qualities. National new broke out and tobacco companies were forced to reveal the truth.
Likewise, in our communities examples of courageous people who report fraudulent wrongdoings by businesses and government agencies abound. Recently a New Hampshire resident reported how medical product companies sent her diabetes medication without previous authorization from her doctor. Her report led to the discovery of how the medical companies had been sending medications without doctor authorization to many other people, and submitting unauthorized claims to Medicare. Ultimately, the companies paid $35 million to resolve the allegations.
Our society relies on courageous people to detect and stop businesses and government institutions from violating people’s rights, engaging in corruption, committing fraud, or outright lying. Recognizing the value of these informers in helping maintain a strong democracy, the law encourages citizens to report potential wrongdoings by offering extensive legal protection and a generous compensation. Just last month President Obama signed into law a legislation that expands protection for whistleblowers against retaliation.
Massachusetts offers plenty of legal defenses for citizens who report false claims and other transgressions made by government agencies and private businesses, or at their places of employment. The False Claim Act and the Whistleblowers Act, set forth in the Massachusetts General Laws, defines the types of activities that should be reported and the rewards for those who take action. We would like to provide a brief summary of its contents.
According to Section 5B, it is unlawful to:
1) present a false or fraudulent claim for payment from the commonwealth or any state agencies 2) enter into a contract with the commonwealth knowing that the information in the contract is false 3) conspire to defraud the commonwealth through the payment of a fraudulent claim 4) possess property or money belonging to the commonwealth or any state agency and not deliver back all of it
5) deliver a receipt of property of the Commonwealth or any state agency with the intent of defrauding
6) buy or accept a debt pledge for public property from someone who may not lawfully sell or pledge such property 7) use false material in an obligation to pay to the commonwealth or state agency, or conceal and avoid or decrease an obligation to pay
8) benefit from a false claim to the commonwealth or state agency and then fail to report it
The only type of fraudulent activity not included in this act is tax evasion.
How do I report fraud?
According to Section 5C of the False Claims Act, a whistleblower may bring a lawsuit on his behalf and that of the commonwealth through a qui tam civil action, for which one needs an experienced team of lawyers. The attorney general then investigates the violations, and brings civil action in the superior court against the violator. The filed complaint remains under seal for at least 120 days.
To successfully bring up the lawsuit, one must have strong supporting documents, and must bring the violation to light within 6 years from the date it occurred. It is thus imperative to report fraudulent activities as soon as possible.
What happens next?
The Attorney General then takes control of the lawsuit and may settle a fraud claim if a Court finds the proposed settlement “fair, adequate and reasonable under all the circumstances.”
What does the fraudulent organization lose?
There are severe penalties for those who violate the Mass False Claims Act. For each violation of the statue, the unscrupulous organization is subjected to civil penalties between $5000 and $10,000 plus three times the amount of damages on the Commonwealth. If the wrongdoer repeated the fraud various times, such penalties can rise into the millions of dollars.
What do I, as an informer, gain?
For bringing into light a fraudulent activity, a person may be rewarded with a generous financial compensation. If successful, the whistleblower is entitled to 15-25% of recovered proceeds, plus attorneys’ fees and costs (all paid by the defendant). The percentage rises to between 25 to 30% if the Attorney General declines to intervene in the case. If the court determines that ultimate recovery was primarily based on information other than what the whistleblower responded, he receives 10% of proceeds. If the whistleblower participated in the alleged violations, the percentage is reduced.
The False Claims Act –also known as the Lincoln Law –was first passed during the Civil War, when fraudulent contractors sold the Union Army decrepit horses and mules, faulty ammunition and rancid provisions. Although we may not be dealing with sick mules nowadays, private and public organizations still engage in under-the-rug deceitful practices. For the common good, we must report them.
If you are witness or victim of a fraudulent act, we invite you to contact our veteran Whistleblower Attorneys today. We applaud your courage to bring forth a fraudulent activity, for which we will work relentlessly by your side in the sensitive case. With nearly 50 years of experience in the Boston area successfully representing our clients, the legal team at Altman & Altman, LLP will thoroughly evaluate your case, and relentlessly pursue a Massachusetts whistleblower/qui-tam lawsuit against any entities that may have engaged in false claims. At Altman & Altman, LLP, we are committed to best serve our clients’ legal needs. We are available anytime of the day to answer case questions, and we take no fee unless successful. For your free initial consultation, please call Altman & Altman LLP today.
To read the False Claims Act and Whistleblowers Act in full, Ch. 12, Secs. 5A-5O, click here.
For more examples on how whistleblowing increases transparency in our society, click here.
