15 www.loubar.org May 2025 Kentucky should join other states in enact- ing a separate state statute because the FCA works. We know this from the billions of dollars recovered for the federal govern- ment. In fiscal year 2024, the government received $2,920,738,612 from FCA cases, with $403,971,450 being paid to the whistle- blowers who filed FCA complaints. See “Fraud Statistics – Overview, October 1, 1986 - September 30, 2024,” Civil Division, U.S. Department of Justice. Since 1987, the government has recovered $78,324,115,560 from all FCA suits (including ones the gov- ernment filed without a whistleblower), with whistleblowers earning $9,510,068,042 of this as a reward for initiating and helping the government on these FCA cases. Id. Two of the more successful FCA cases in 2024, from a tax recovery standpoint, were cases against Endo Health Solutions and Community Health Networks. Endo Health, a seller and marketer of opioid drug Opana ER, settled for $475.6 million dollars regarding allegations the company targeted prescribers who provided opioids for nonmedical reasons. See United States Department of Justice Press Release, January 15, 2025. Community Health agreed to pay $345 million dollars for alleged kickback violations from remunerating physicians for patient referrals. Id. In addition to these health care settlements, the government recovered significant funds in 2024 from mili- tary procurement fraud, general government contract fraud and COVID pandemic-related fraud, which by itself amounted to more than $250 million in tax dollars and penalties returned to the federal treasury. Id. Although the amount a whistleblower re- ceives is dependent on a number of factors, including whether the government intervenes in a qui tam, the whistleblower is typically entitled to between fifteen percent (15%) and thirty percent (30%) of the government’s recovery. These numbers do not include the statutory attorneys’ fees defendants are required to pay to prevailing whistleblower attorneys, or separate damages under the FCA for employer retaliation against a whistleblower. It is important to note, too, that a whistleblower is not required to be an em- ployee or ex-employee of a federal contrac- tor. Instead, the whistleblower is required to have knowledge of the false claims or fraud, which could arise from being a customer, competitor or even a former spouse of a potential qui tam defendant. For the practitioner, the FCA has numerous requirements and potential hurdles. Although exceptions exist for these, three important requirements should be on a practitioner’s mind in pursuing a case or referring one to an FCA attorney. First, the FCA is a first to file statute, meaning if multiple whistleblow- ers file similar complaints, the one who filed first will be entitled to seek the whistleblower’s share of the government’s recovery. Any late filers may receive a thank you from the government for supporting the case, but will not receive a share of the proceeds if the case is successful. Second, to be compensated as a whistle- blower, he or she must be the original source for the government’s case. If the government (Continued from previous page) is already investigating the fraud, or if the filing is based on derivative knowledge such as a news article, the whistleblower’s unoriginal case will likely be dismissed. As noted, exceptions exist and if a whistleblower is the original source of the government’s in- quiry, then this an exception to the first to file rule—meaning if the government has already opened a case based on the whistleblower’s information, the original whistleblower could be a successful subsequent filer of a lawsuit if the whistleblower was the original source of the government’s opened investigation. Third, the case must be filed under seal and the whistleblower cannot disclose the existence of the suit to anyone other than his or her attorney, the United States At- torney’s Office, the federal Department of Justice and the federal judge and magistrate assigned to the case. The seal allows the government time to investigate the allega- tions without the defendant(s) knowing of the lawsuit’s existence. If the whistleblower and his or her attorney fails to file properly under seal or violate the seal, consequences can include being found in contempt and losing part of the whistleblower’s recovery share. The seal also creates issues defending a case when the government first makes con- tact. A practitioner could have a client who received a federal government civil investiga- tive demand subpoena (CID) for documents and information, but then not be able to garner information from the United States Attorney’s Office about whether the case arose from a whistleblower suit, or who the whistleblower is, because the case is under seal. In these situations, knowing FCA law, working through the requested information and documents, determining whether any current or ex-employees are whistleblowers and evaluating whether the client violated the FCA are imperative considerations in responding to a CID. With the current federal administration terminating inspector generals, whose task it is to identify fraud in federal government programs, the need for whistleblowers and attorneys who represent them may be greater than ever. Conversely, the current adminis- tration’s stated focus through the Department of Government Efficiency to root out alleged fraud may be an indication qui tam litigation will be a focus for, and funded better at, the Department of Justice over the next few years. If so, this would result in consequences for both sides of qui tam litigation and at- torneys should learn to recognize the telltale whistle of a client with a potential FCA case. Former LBA President C. Dean Furman, Jr. served as a federal prosecutor in the United States Attorney’s Office for the Western District of Kentucky. He was the District’s Healthcare Fraud Coordinator and prosecuted cases involving healthcare fraud, bank fraud, insurance fraud, bankruptcy fraud, counterfeiting, public integrity and other white-collar crimes. Since rejoining private practice, Dean has handled various healthcare, whistle- blower, personal injury, criminal and commercial litigation matters. n Leadership Kentucky recently selected Stites & Harbison attorney Jackson B. Hurst-Sanders as one of 24 participants for the ELEVATE Kentucky Class of 2025. ELEVATE Kentucky is a leadership development program designed for millennials and young professionals. Training sessions provide participants with professional development skills and a better understanding of the Commonwealth’s challenges and opportunities in order to advance their careers, their companies and their communities. Hurst-Sanders is an attorney based in the Louisville office. He is a member of the Business Litigation Service Group. Hurst-Sanders earned his J.D. from the University of Kentucky J. David Rosenberg College of Law, summa cum laude and Order of the Coif, in 2023. Legal Aid Society is pleased to announce that John Young has been selected by the Board of Directors as the organization’s next Executive Director—he assumed the duties of ED on April 18. The Board of Director conducted a nationwide search over the past two months, engaging with former Executive Director Neva Polley-Scott to help lead the effort and conduct a thorough review of candidates. Young was hired as a staff attorney at the Legal Aid Society in 2001. He has spent his professional life at Legal Aid handling predominantly family law, landlord-tenant, expungement and tax cases. Most recently, Young served as Deputy Director overseeing the internal operations of the public interest, not for profit law firm. He received his J.D. from the University of Dayton School of Law. The Kentucky Chamber of Commerce, in collaboration with the Kentucky Society for Human Resource Management, has recognized McBrayer PLLC once again as one of the Best Places to Work in Kentucky, specifically in the small-sized employer category. McBrayer PLLC is delighted to be named among the best small-sized employers to work for in Kentucky and is honored by its employees, whom it is privileged to have within its ranks. n Members on the move Hurst-Sanders Young $75 LBA Member $150 Non-Member 9:00 a.m. - 5:00 p.m. Tuesday, June 24 LBA, Bar Center 6.0 (including 1.0 ethics) CLE Hours www.loubar.org Technology evolves faster than law. Without a strong brand, thought leadership and AI tools, you risk getting overlooked and losing billable hours. Gain essential strategies to enhance your reputation, attract clients and streamline your practice. Don't get left behind—attend and stay ahead. FUTURE-PROOF FUTURE-PROOF PRACTICE PRACTICE Marketing and Technology Essentials for Legal Professionals Conference Presented in partnership with: www.loubar.org 502-583-5314
