The False Claims Act is legislation that addresses qui tam. Enacted in 1863, the act has undergone many alterations with the latest in 2010.
The US Department of Justice explains the False Claims Act is an anti-fraud law offering the oldest advice on qui tam.
Origination of act
The act came from issues stemming from the Civil War. It allows for the prosecution of people who were trying to defraud the US when providing supplies to the Union army.
Qui tam action
The qui tam provision of this act allows for anyone to bring a lawsuit on behalf of the government for known violations. So, under the original intentions, if a regular citizen discovered a company was trying to rip off the army when selling it supplies, that regular citizen could file a case against the supplier.
The basis here is that the government cannot be everywhere. It cannot always keep tabs on everything. Plus, private citizens often are privy to information government officials are not. Since the government in the US belongs to the people, qui tam is really just them protecting what belongs to them. Fraud against the government is fraud against the people because, in the end, it is the people who have to pay the price for any losses.
Filing a case
When filing a qui tam case under the act, a person will do so with the court under seal. The complaint must remain under seal for 60 days while the government investigates the claims. Investigators can extend this seal period if needed. The government then will decide what steps to take next and alert the court.