The government refused to comment on a recently unsealed whistleblower lawsuit that claims Navy contractors were engaged in a kickback and bribery scheme from dating as far back as 2004. The contractor accused of bribery was the now-defunct Advanced Solutions for Tomorrow (ASFT) and was located in both Georgia and Rhode Island. The individuals that brought forth the claim, Rekha and Karan Vasudeva, were involved in establishing the company in Georgia. A concurrent criminal investigation was initiated in 2011. No information is available yet as to why ASFT was allowed to continue with its practices after the criminal investigation was started. ASFT’s scheme involved multiple shell corporations and approximately $120 million in Navy contracts. The criminal investigation is ongoing and no sentences have been issued to date.
The civil claims were filed in the form of a qui tam lawsuit which is a claim under the Federal False Claims Act (FCA). The FCA allows individuals with knowledge of false claims to come forward and expose corruption and in return receive an award comensurate with the size of the recover. Often, as is the case with Medicare and Medicaid false claims, the profits from false claim schemes come at the cost of American taxpayers. To protect whistleblowers qui tam cases are filed under seal and the names of informants protected during the investigation to prevent any retaliation. The whistleblower may also be able to receive a portion of the recovery ranging from 12-30% if the recovery can be attributed to the original information they shared.
Unfortunately, not all whistleblowers follow the proper procedures to protect their claims. Recently, a Massachusetts federal court dismissed a case when the defendant, a drug company, alleged that the information the Plaintiff relayed information that was publicly available and therefore was barred by the FCA’s public disclosure rule.
There are many laws that allow whistleblowers to bring forth claims of wrongdoing, safety issues, and fraud. Some laws protect whistleblowers from retaliation and provide for rewards, while other do not. The procedure for filing claims varies from law to law. The FCA public disclosure rule is one example of this and requires that, if the information relayed by the whistleblower not be publicly available, or if it is, that the whistleblower is the original source of the public information. Sometimes this can be tough for whistleblowers to prove.
“The decision of the Massachusetts court illustrates why it is important for whistleblowers to present their claims through the proper channels. A defendant can sometimes avoid liability under the qui tam provisions of the FCA if the alleged acts are exposed or reported in the wrong manner. This doesn’t mean that the fraud didn’t occur… It’s important that when someone is aware of potential false claims they contact an experienced attorney for advice,” says Christopher G. Paulos, an attorney with Levin, Papantonio.