Two recently unsealed qui tam actions reveal efforts by former employees of government contractors to bring False Claims Act actions predicated on claims of human trafficking. Under the FCA, whistleblowers, can file qui tam actions alleging fraud against the government. Successful FCA claims can expose defendants to treble damages, substantial penalties, and debarment. In the two recently unsealed actions, the alleged fraud was predicated on violations of the Trafficking Victims Protection Reauthorization Act, which imposes liability on companies for knowingly benefiting from a venture that engaged in forced labor. The relators in both cases premised their FCA claims on an “implied certification” theory, meaning that the employer-government-contractor impliedly certified compliance with all conditions of payment when it submitted its invoices to the government for payment, and, because compliance with TVPRA was an implied condition of payment, the undisclosed violation of the TVPRA would constitute a fraudulent or false claim. While one of the cases was dismissed, the other remains and because qui tam cases are initially filed under seal, it is likely that other such cases already are in progress and will be unsealed in the near future.
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