False Claims Act Cases – Proving a Fraud Like Any Other Fraud

False Claims Act Cases – Proving a Fraud Like Any Other Fraud


04/12/2013 // San Francisco, CA, US // Justice News Flash: Featured Column // Kathleen Scanlan // (press release)

(Whistleblower News) The False Claims Act is characterized by unique procedural mechanisms like the qui tam provision. However, at its core, the False Claims Act is about fraud. And whether you are talking about fraud on the government, securities fraud, mortgage fraud, insurance fraud or consumer fraud – or any other kind of fraud, there are certain themes that emerge. The most important of these is that the best evidence will ultimately be found in documents – not necessarily witness testimony.

Documents are simply a critical component to proving any fraud case. As a television-watching society, we are conditioned to believe there will be some dramatic scene where the whistleblower stands in open court describing the fraud and the judge and jury all immediately agree that the defendant’s conduct is unlawful. The reality of most fraud cases is far different. Sure, sometimes there are dramatic moments where a witness’ testimony leads to a major break in the case. But almost without exception that moment was only possible through hours and hours of hard work combing through documents, piecing together the complete picture of the unlawful scheme. Even then, judges rarely make decisions from the bench in these kinds of cases. Judges deliberate behind closed doors with the benefit of all the documents around them.

Understanding the role of documentary evidence is critical for any lawyer evaluating a whistleblower claim, or any potential whistleblower. That said, there is no single “smoking gun” document to look for in a False Claims Act case. A judge once aptly noted that fraud is only limited by the imagination of those perpetrating the schemes. Since every fraud is different, the documents to prove a particular fraud will be different too. For example, a nurse exposing fraudulent care will not have the same documented evidence as an auditor who finds evidence of upcoding in a Medicare bill. The nurse might have memos or doctors’ orders and the auditor spreadsheets and billing reports.

Even with all these differences, documents can still be grouped in categories. Some are obvious, including but of course not limited to, institutional memos, emails, the actual government contract, any audits or audit reports. However, other important categories are often overlooked, including organizational charts, employee directories (including outdated ones that might identify ex-employees) and training manuals. This kind of evidence may help identify who knew what and the extent to which they knew the alleged conduct was improper. This makes this kind of information very helpful for the government investigators who will conduct their own investigation of the whistleblower’s fraud allegations, including contacting other potential witnesses.

Finally, while documents are critical, whistleblowers need to be careful not to go too far in making copies. As a rule of thumb, if the witness came across the document in the ordinary course of the job, it is probably ok. Of course, the whistleblower’s best course of action is to contact a lawyer with experience in these kinds of cases and to develop a strategy that will protect the whistleblower and achieve the ultimate end goal of stopping the fraud.

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