Today is the first entry in our occasional series "Virginia Fraud Against Taxpayers Act Filings," in which we will post and discuss unsealed VFATA filings from across the Commonwealth. 

The VFATA was passed in 2002 and became law on January 1, 2003.  The first filing under the statute followed shortly thereafter, in April of 2003 with the case captioned as Virginia Turf Management Associates and the Commonwealth of Virginia v. Mary Susan Resolute, et. al.  The case was filed in the Circuit Court for the city of Norfolk and given case number 2003-998.

The Commonwealth intervened at the same time the case was unsealed.  For those of you new to qui tam practice under either the Federal False Claims Act or the VFATA, a brief discussion of the procedure under either statute will be helpful. 

Under both the VFATA and the Federal False Claims Act (31 U.S.C. 3729) cases are filed under seal and remain so for either 60 days (under the federal statute) or 120 days (under the VFATA).  During that time, the sealed complaint is served on government.  Under the Virginia statute, the Attorney General for the Commonwealth is served and under the Federal False Claims Act the United States Department of Justice is served as well as the local office of the United States Attorney.

When the complaint is served on the government, the government has to decide whether or not to intervene in the case.  To "intervene" essentially means that the government takes over prosecution of the case, and the private plaintiff (in the parlance of qui tam, the plaintiff is called the "relator") is more or less left with prosecuting the retaliation claim, if any, and assisting the government in whatever way the government requests.

If anyone thinks that government intervention is not desirable, they are wrong.  Much to the contrary, a private litigant and his or her attorney (no matter how skilled and wealthy) simply cannot bring all of the resources to bear that the government can.  For this reason, among others, recoveries are much higher in cases where the government elects to intervene.

The relator is also required to serve a disclosure of all material evidence on the government, and it is best to do this prior to filing the complaint under seal, for reasons that are beyond the scope of this post.

Note that serving the sealed complaint on the government is a jurisdictional requirement under both the FCA and the VFATA, and it is best to include those allegations in the complaint.  The complaint in Virginia Turf Management did not include these allegations, but it was not crucial, as the Commonwealth intervened.

We will present more of the public information from this case in future postings, but in the meantime, please feel free to post any questions or comments.

Zachary A. Kitts
zkitts@cookkitts.com
www.cookkitts.com

cases are filed under seal and served on the Commonwealth