First enacted in 1991, Illinois’ False Claims Act allows a whistleblower with information about a fraud committed against Illinois to file a lawsuit on behalf of the state and share in a settlement or judgment. See 740 Ill. Comp. Stat. §§ 175/1 to 175/8. Much like the federal FCA, certain actions and conduct implicate the Illinois FCA and trigger penalties. These actions include knowingly submitting a false claim for payment by Illinois, making or using a false record or state to get your claim paid by Illinois, conspiracy to commit these acts, or making or using a false record to avoid repaying the state. In addition, the Illinois False Claims Act also covers claims presented to the state’s National Guard (although this is unlikely to apply to a healthcare provider or supplier). Like the federal FCA, the Illinois False Claims Act does not cover claims, records, or statements made under the Illinois Income Tax Act.
The state statute calls for a minimum civil penalty per false claim, $5,500, and a maximum penalty of $11,000, in addition to treble damages. Whistleblowers with knowledge of a fraud against Illinois should consult an attorney and file a disclosure with the state pursuant to 740 Ill. Comp. Stat. 175/4(e)(4)(B) to preserve their status as an original source of the information about fraud. Cases may be brought within the later of (1) six years from when the alleged violation occurred, or (2) three years after the violation was discovered by the relevant state agency, but no more than ten years after the violation was committed.
The Illinois FCA includes a qui tam mechanism nearly identical to the one in the federal FCA which allows for an award of between 15% and 30% depending on whether or not the state chose to intervene. Moreover, the state FCA protects whistleblowers from employer retaliation, and even establishes a Whistleblower Reward and Protection Fund as part of the State Treasury. After a settlement or judgment, the entire amount is deposited in to the fund. One-sixth of the total is paid to the Illinois Attorney General, another one-sixth is paid to the Department of State Police for law enforcement costs, and the remaining two-thirds are paid as awards to qui tam relators, to cover attorneys’ fees and expense, and for other expenses as designated by the Illinois False Claims Act.
In March 2014, Attorney General Lisa Madigan announced that the state would receive $12.1 million, plus interest, from Teva Pharmaceuticals USA and a subsidiary to settle claims that it violated the state’s False Claims Act. In an alleged scheme to defraud the state and federal government, Teva made payments to a Chicago doctor in return for him prescribing its pharmaceuticals to thousands of Medicare and Medicaid patients. This illegal kickback scheme cost the state millions.
In May 2014, McHugh Construction, a Chicago-based company, agreed to pay the United States and the State of Illinois $12 million to settle allegations of fraud. Illinois received $4.8 million after McHugh allegedly violated the Illinois FCA by making false statements and claims for payment to state agencies after the company claimed it met federal and state requirements to participate as a disadvantaged business to obtain contracts to perform seven public construction projects. The State of Illinois partly funded work on area roads, highways, and transit lines.