When a company does something wrong, it can be scary to stand up to them. For this reason, the government enacted whistleblower protections that help keep employees safe from retaliation when they report the bad deeds of an employer.
Whistleblower protections also help to ensure the government uncovers bad actors. One specific law that addresses this type of situation is the False Claims Act, which establishes the concept of qui tam.
More about the act
The False Claims Act went into effect in 1863 during the U.S. Civil War. It was to help prevent contractor fraud when supplying the Union with goods. At that time, these suppliers were trying to take advantage of the chaos and desperation of wartime to make a profit from the government. This act put penalties into place and developed the idea of qui tam.
Qui tam explained
Citizens often become aware of illegal deeds long before the government does. Qui tam allows citizens to easily help out by bringing a lawsuit to court on the government’s behalf. It is a way for citizens to protect their country against bad actors who are trying to rip off the taxpayers. For their efforts in fighting against wrongdoers, qui tam filers have the right to a portion of the money won by the government in the case.
Penalties under the act
The False Claims Act allows for a fine of three times the damages the government incurs as a result of the misdeeds. The door also opens for other potential charges stemming from trying to defraud the government.