The Qui Tam Blog

A Qui Tam suit has been brought against J-M Manufacturing Co and Formosa Plastics Corp, the manufacturing company’s previous parent company. Four states, twenty-one water districts and twenty-two cities in California have brought the lawsuit following reports that J-M Manufacturing had been supplying sub-standard PVC pipe.

The suit accuses J-M of taking several “cost-cutting” measures, including producing inferior quality PVC pipe, filling supervisor positions with inexperienced workers and providing independent quality-testers with a higher quality sample of product than what was actually being provided to customers.

For cities using these PVC pipes for water management, inferior quality product means a bad investment in public infrastructure. John Hendrix, who worked as an engineer in the J-M’s product assurance department, blew the whistle on the manufacturing company’s product quality issues and was reportedly fired by the company a week later.

The suit states that Hendrix’s employment was terminated after he wrote a memo to upper management informing them that the tensile strength of the PVC pipe being supplied was below the certification agency standards provided by Underwriters Laboratories, Inc.

Do you know about fraud committed against the Federal or State government? It may be time to call a whistleblower attorney to represent you in court. This article will help you understand the basis for and method of filing a Qui Tam lawsuit or what is better known as a ”Whistleblower” lawsuit against a corporation or medical practice that is defrauding the government.

The False Claims Act (FCA) was originally passed during the Civil War, but was amended in 1986 and gives citizens a potential monetary reward for reporting fraud. Typically, the individual who has reported the fraud is an employee or former employee of the corporation in question. This individual, known as the “relator,” is the whistleblower.

Once the “whistle is blown” as it were, the Department of Justice will review the case and decide whether or not it wants to intervene. Since the 1986 amendments, whistleblower attorneys have been able to recover over $12 Billion.

You will want to contact a whistleblower attorney for healthcare fraud (Medicare, Medicaid, drug corporation) or other government contracting frauds. A good attorney can represent your case and help you learn the details of being a relator in the case.

Turning a corporation in for fraud does not need to be a daunting process with the help of an experienced whistleblower attorney. It can be financially beneficial to you as the relator, and is also of beneficial to your country. If you suspect fraud and are interested in filing a claim, don’t hesitate to contact a whistleblower attorney.

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz

FCA liability will attach when a false statement is relevant to the government’s decision to confer a benefit, even if the false statement is made by an individual that is not a party to the claim submitted to the government for payment.  This is because the FCA contemplates liability for causing the government to approve a false claim, in addition to causing the government to pay a false claim.  Therefore, a vendor who falsely certifies the creditworthiness of a potential homebuyer for purposes of obtaining Department of Housing and Urban Development (HUD) insurance for mortgage-secured loans will be liable under the FCA if and when the homebuyer submits a claim to HUD after defaulting on the loan.  This is true despite the fact that the vendor is not a party to the claims submitted to HUD because the vendor’s false statements with regard to the creditworthiness of the purchasers induced the government to insure homes, approve claims, and confer a benefit of monetary payments to the homebuyers.  United States v. Eghbal, 548 F.3d 1281 (9th Cir. 2008).

The Other Kinds of Fraud section of this blog is currently being developed.  For more information, visit the Qui Tam section of the Berg & Androphy web site.