By Shauna Itri
The Chicago False Claims Act allows whistleblowers to bring a qui tam lawsuit in the name of the City of Chicago if he or she has information related to fraud, waste, and abuse being perpetrated on the local government.
Chicago False Claims Act Liability
Under the Chicago False Claims Act, similar to the Federal False Claims Act, any person can be liable who:
(1) knowingly presents, or causes to be presented, to an official or employee of the city 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 to get a false or fraudulent claim paid or approved by the city;
(3) conspires to defraud the city by getting a false or fraudulent claim allowed or paid;
(4) has possession, custody, or control of property or money used, or to be used, by the city and, intending to defraud the city or to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;
(5) authorized to make or deliver a document certifying receipt of property used, or to be used, by the city and, intending to defraud the city, makes or delivers the receipt without complete knowledge that the information on the receipt is true;
(6) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the city who lawfully may not sell or pledge the property; or
(7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the city
Chicago False Claims Act, § 1-22-020.
Chicago False Claims Act Damages
If the person accused of fraud is found liable, he/she is liable to the City of Chicago for a civil penalty of at least $5,000 and no more than $10,000, plus three times the amount of damages which the city sustains because of that person’s actions. A person violating this statute shall also be liable to the city for the costs of a civil action brought to recover any such penalty or damages. Chicago False Claims Act, § 1-22-020.
Chicago False Claims Act Procedure
In order to bring a claim under the Chicago False Claims Act, a person must bring an action in the name of the city for a violation of section 1-22-020 “for the person and the city.” Id. at §1-22-030(b)(1).
The person filing the civil action must serve a copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the city. Id. at §1-22-030(b)(2). Service upon the city shall be made by leaving a copy with the city clerk. Id.
Once the complaint is filed and served, the complaint shall remain under seal for a period of sixty (60) days. Id. For good cause shown, the City can move the Court to extend the seal. Id. at §1-22-030(b)(3). Before the seal expires, the City can proceed with the action, or notify the Court that it declines to take over the action, in which case the person bringing the action has the right to conduct the action. Id. at §1-22-030(b)(4).
Chicago False Claims Act Award
If the city proceeds with the action and obtains a recovery, the whistleblower shall receive 15-25% of the proceeds of the action or settlement of the claim. Id. at §1-22-030(d). If the City declines to proceed with the action, the whistleblower shall receive 25-30% of the proceeds of the action or settlement of the claim, depending on how much the whistleblower contributed to the case. Id.
If the Court finds that the action is based primarily on specific information that has been publicly disclosed, the Court may award sums as it considers appropriate, but in no case more than ten percent (10%) of the proceeds. Id. In addition, the Court may award reasonable attorneys’ fees and expenses to the whistleblower attorney. Id.