Oct. 23, 2014
By Tammy B. Scelfo & Jessica S. Allain, Attorneys at Allen & Gooch
Know about fraudulent activity? Planning on blowing the whistle? You better lawyer up and file a qui tam action first; otherwise the Fifth Circuit says you are not entitled to any proceeds from the Government’s recovery.
In a case involving an issue of first impression for the United States Fifth Circuit Court of Appeals, the court was asked to determine whether relators in a qui tam action filed after the government had instituted criminal proceedings against the defendants could share in the recovery by the government. In United States ex rel Babalola v. Sharma, the Fifth Circuit held that because relators did not file their qui tam proceeding before the U.S. Government instituted criminal proceedings, they were not entitled to any of the recovery proceeds.