This ruling by a federal appellate court involves their interpretation of the Alternate Remedy provision in the False Claims Act, 31 U.S.C. § 3730(c)(5). In a case of first impression, the United States Court of Appeals for the Fifth Circuit denied two relators, who had alerted the government to a multi-million Medicare and Medicaid fraud scheme, any reward for disclosing their information to the authorities because they had waited to file their whistleblower lawsuit until after the government had already indicted the defendants, rather than filing it before the criminal proceedings had begun. With the relators’ information and agreement to testify at trial, the government was able to secure guilty pleas from the defendants on fraud charges, as well as, a $43 million award for criminal restitution. Still, because they filed their qui tam complaint too late, the relators received no financial compensation.
Although the three judges were unanimous in ruling against the two relators, one of the judges wrote a concurring opinion which stated that, while the court’s conclusion was the correct one, the result was “arguably inequitable and illogical.”
The case is captioned United States of America, ex rel. Samuel Babalola; Kayode Samuel Adetunmbi v. Arun Sharma, doing business as Allergy Asthma Arthritis & Pain Center; Kiran Sharma, doing business as Allergy Asthma Arthritis & Pain Center, 2014 U.S. App. LEXIS 2823 (5th Cir. Feb 14, 2014).
