How the False Claims Act Provides Whistleblowers Protection in North Carolina

In 2009, Governor Beverly Perdue signed the North Carolina False Claims Act into law, providing whistleblowers protection when reporting fraud. Like the federal False Claims Act, the North Carolina False Claims Act allows private individuals to file a lawsuit, called qui tam claim, through a whistleblower law firm on behalf of the State of North Carolina. A qui tam lawsuit is filed against a person(s) or business for submitting or causing the submission of false claims to the state, or becoming aware of mistakenly submitted claims and failing to submit repayment.

North Carolina False Claims Act Specifics

The North Carolina False Claims Act–N.C.G.S §§1-605 through 617 states that any party shall be liable to the State for up to three times the amount of damages that the State sustains from someone who:

  1. Knowingly presents or causes to be presented a false or fraudulent claim for payment or approval
  2. Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim
  3. Conspires to commit a violation of subdivision
  4. Has possession, custody, or control of property or money used or to be used by the State and knowingly delivers or causes to be delivered less than all of that money or property
  5. Is authorized to make or deliver a document certifying receipt of property used or to be used by the State and, intending to defraud the State, makes or delivers the receipt without completely knowing that the information on the receipt is true
  6. Knowingly buys, or receives as a pledge of an obligation or debt, public property from any officer or employee of the State who lawfully may not sell or pledge the property
  7. Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the State, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the State

Any party who commits any of these acts shall also be liable to the State for the costs of a civil action and shall be liable to the State for a civil penalty up to $11,000 per violation, in addition to three times the amount of damages sustained by the state due to that party.

Whistleblower Rewards & Protection in North Carolina

The North Carolina legislature recognized that most fraud against the state goes unreported. That is why the North Carolina False Claims Act rewards whistleblowers by allowing individuals to receive a percentage of any recovery in exchange for information. Damages for violating the North Carolina False Claims Act may include treble damages and significant fines. If the North Carolina Attorney General intervenes in the claim, the whistleblower may receive up to 25% of the recovery.

The North Carolina False Claims Act also provides whistleblower protection against workplace retaliation by employers. It is well recognized that most individuals who become aware of fraudulent schemes are employed by the business. The NC FCA prohibits employer retaliation, which may includ pay deductions, a demotion, suspension, firing, harassment, threats, or other acts.

If a business is found liable for retaliation under the North Carolina False Claims Act, it may be required to pay two times the amount of back pay, interest, monetary damages for discrimination, and attorney fees if the employee obtained legal help from a whistleblower law firm.

Another protection that the North Carolina False Claims Act affords whistleblowers is allowing lawsuits to be filed under seal, or in secret. The State of North Carolina has 120 days to decide whether to intervene before the case is unsealed. Often, the State petitions the court to grant an extension to increase the amount of time the case is under seal.

North Carolina False Claim Cases

North Carolina whistleblower law firms can assist individuals reporting many types of fraud, from schemes against healthcare programs to government contractors. These fraudulent acts are multifaceted and may include a variety of violations, from billing to providing pricing norms. Here are three recent cases in North Carolina that illustrate the scope and prevalence of these fraud schemes:

  • A Charlotte behavioral health services provider was found guilty of Medicaid fraud, COVID-19 fraud, and money laundering, and required to pay $481,436.08 in restitution.
  • A Mooresville man pleaded guilty to a multimillion-dollar investment scheme for fraudulently obtaining 2.6 million in COVID relief funds.
  • A urine testing lab and owner resolved FCA allegations, agreeing to pay $235,000 for violating the North Carolina False Claims Act in a Medicaid billing and kickback scheme.

Whistleblower Attorney in Raleigh, NC

Stacy Miller, II, at Miller Law Group, has extensive experience representing North Carolina whistleblowers in False Claim Act cases. His law firm’s practice areas include Healthcare Fraud, Government or Defense Contractor Fraud, and whistleblower protection.

Contact us today for a free consultation about your whistleblower claim.