Virginia

Understanding the Virginia Fraud Against Taxpayers Act

Passed in 2002, the Virginia Fraud Against Taxpayers Act is one of the country’s more powerful state statutes for reporting and penalizing fraud involving taxpayer funds.

In order to qualify for reporting under the Virginia Fraud Against Taxpayers Act, the false claim must involve taxpayer funds in any area of the “Commonwealth.” The law does not differentiate between the state government or municipal governments in Virginia. Therefore, most kinds of local or state fraud can be brought to justice under this expansive false claims statute.

Examples of possible fraud reportable under the Virginia Fraud Against Taxpayers Act include, but are by no means limited to:

• Healthcare fraud
• State government contracts fraud
• State university funding or other public school education fraud in Virginia
• Infrastructure fraud
• Local municipal fraud

Exceptions to the Virginia Fraud Against Taxpayers Act

It is important to note that state or local tax fraud is not covered by the Virginia Fraud Against Taxpayers Act. Additionally, information that has already been publicly disclosed is not eligible for a whistleblower reward in Virginia.

Finally, there are certain restrictions on employees of the Virginia Commonwealth when they attempt to report state-level fraud. However, those employees can still report fraud under the federal False Claims Act. Likewise, a federal employee may still file under the Virginia Fraud Against Taxpayers Act. The extent of qui tam relator restrictions on government employees continues to be debated by several federal court decisions.

What is Considered “Knowing” under the Virginia Fraud Against Taxpayers Act?

Fraud must be committed “knowingly” for it to be pursued under the Virginia Fraud Against Taxpayers Act. The Virginia state law defines “knowing” as the following:

1. A person has actual knowledge of the fraud they are committing
2. The person acts “in deliberate ignorance” in order to commit fraud
3. The person acts “in reckless disregard” of the truth or falsity of the situation.

Virginia law requires no proof of intent to defraud the taxpayer, specifically. Instead, this “knowing” qualification establishes liability under the Virginia Fraud Against Taxpayers Act.

Virginia Fraud Against Taxpayers Act Fines and Fees

The Virginia Fraud Against Taxpayers Act imposes fines per instance of fraud, currently set at no less than $10,957 and not more than $21,916 per violation. However, these liability limits are set to be automatically adjusted under the federal False Claims Act, which is linked to national inflation rates.

In addition to these financial penalties, the Virginia Fraud Against Taxpayers Act allows for the recovery of up to treble damages incurred by the Commonwealth, as well as attorneys’ fees and legal costs incurred by the whistleblower who reported the fraud.

Whistleblower Awards under the Virginia Fraud Against Taxpayers Act

Virginia whistleblowers who come forward with useful information may be eligible to receive between 15 and 25 percent of the Commonwealth’s recovery. In cases where the Commonwealth of Virginia declines to intervene, the whistleblower can still pursue the case on their own and collect a reward. It is advisable to work with a nationally recognized qui tam law firm like Tycko & Zavareei LLP to maximize the chances of government intervention in your claim.

Virginia False Claims Statute of Limitations

A “statute of limitations” indicates the time allotted for filing a claim. Filing after its deadline could lead to the dismissal of your claim. The statute of limitations for false claims made against the Commonwealth of Virginia is threefold:

1. No more than six years after the date on which the violation is committed
2. No more than three years after the date when facts of the fraud become known or should have been known by the official of the Commonwealth who has responsibility to act in those circumstances
3. No more than 10 years after the initial violation.

Between these deadlines, whichever occurs last in a particular case is considered to be the defining statute of limitations for that whistleblower. Once the last qualifier has passed, fraud may not be considered actionable under Virginia law.

Filing a Claim under the Virginia Fraud Against Taxpayers Act

If you believe you may qualify to become a Virginia whistleblower and report on fraud against state taxpayers, speak up as soon as possible. Once fraud in Virginia has been reported, it becomes ineligible for a whistleblower reward. Likewise, waiting to speak up may give your employer time to retaliate against you or destroy incriminating evidence.

To become a state whistleblower in Virginia, the following steps are recommended:

1. Contact a whistleblower lawyer. Virginia qui tam law is a complex field involving certain limitations as well as the possibility for federal crossover. A professional qui tam attorney with experience in the field should be retained to handle your claim in order to secure the best possible outcome.
2. Gather evidence. Evidence should always be collected in consultation with a qualified attorney, as certain kinds of proof may be illegal to take, or inadmissible in Virginia courts.
3. File your complaint with the Commonwealth. The complaint will remain under seal for at least 120 days. The action may be dismissed only if the court and the Virginia Attorney General give written consent to the dismissal, as well as their reasons for supporting it. Working with a qui tam law firm for your claim ensures that your identity remains confidential for as long as possible—usually until after the initial investigation into your claim when the lawsuit is served to the defendant.
4. Cooperate with the investigation. Cooperation is a key component to securing the highest possible whistleblower award in cases of fraud in Virginia.
5. Collect your whistleblower award. Whistleblowers in Virginia may be able to receive anywhere from 15 to 25 percent of the State’s recovery in a successful qui tam claim.

If you need help understanding Virginia false claims law or filing your own whistleblower claim, contact the experts with Tycko & Zavareei LLP today. Our dedicated qui tam attorneys can help represent you in the process of recovering defrauded Virginia taxpayer funds.