By now most rail industry union reps and attorneys know there are federal statutes protecting railroad and mass transit employees from whistleblower retaliation. But there is another special federal law that allows such workers to reap multimillion dollar bounties.

The name of that statute is the False Claims Act (FCA). The purpose of the False Claims Act is to punish the dishonest receipt of government monies and thus deter others from defrauding taxpayers. The FCA imposes triple damages and fines against the defrauding party and entitles the whistleblower relator to a share of the government’s recovery, usually around 20% (e.g., the whistleblower’s share on a $100 million governmental recovery is $20 million).

The False Claims Act applies to all federal (and most State) funded contracts, grants, or programs. It imposes liability on any person, business, contractor, or entity that submits a false claim in order to receive governmental funds. Examples of false claims include:

  • Falsely certifying a condition of payment
  • Billing for services not done or that are unnecessary
  • Over billing or double billing
  • Billing for substandard goods or services
  • Failing to pay or refund monies owed to the government

All false claims going back 6-10 years are fair game. However, FCA cases are fraught with hurdles and pitfalls. They can only be brought by an attorney on behalf of the whistleblower relator. Only the first relator to file can recover a bounty. The complaint must be filed under a strict seal. And any public disclosure or breach of the seal can be fatal to a relator’s claim.

One area that has not received the false claims attention it deserves is transportation infrastructure construction projects. Such projects include the construction or renovation of rail, tunnels, bridges, highways, and port infrastructure, and are subject to the FCA because they involve substantial federal and state funding. Two examples are the MTA’s East Side Access to Grand Central Terminal and the Moynihan Station renovation at the Penn Station Post Office.

A recent example of a transportation related FCA case is the $1.3 million dollar settlement in my client Bill Marshfield’s FCA suit against a contractor who installed speed cameras for the New York City Department of Transportation. Marshfield is a master electrician who blew the whistle on the contractor’s installations that did not comply with DOT specifications and electrical codes. His bounty was 21% of that total settlement, and he also will receive 100% of his still pending retaliation claim.

Such FCA fraud is bound to increase once the monies from the federal government’s $1 trillion dollar infrastructure bill start to flow. Experience tells us 5% of those funds will be lost to fraud. That is $225 billion in fraudulent payments. Examples of such future transportation infrastructure projects in the New York City area alone include the construction of the Gateway Hudson River Tunnel, Metro North Railroad’s Penn Station Access, and the repair of the East River Tunnels. Of note, Amtrak will be receiving an additional $68 billion in infrastructure improvement funds, and although Amtrak’s enabling legislation exempts it from the False Claims Act, all of Amtrak’s numerous contractors and subcontractors are fully subject to FCA liability.

So here is the message to all union reps, employees, and managers involved in such transportation infrastructure construction projects: be on the lookout for potential false claims. If you have concrete information showing the misuse of federal or state monies within the past 6-10 years, your first step should be to contact an experienced False Claims Act attorney for a confidential consultation to see if you qualify for what could be a life changing FCA bounty. Start here for more information on the False Claims Act.