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Qui tam fraud suit relator drops his claim, loses out on recovery

A federal judge says that a former qui tam whistleblower's voluntary decision to walk away from a fraud action he filed now "precludes him from clambering back on board for a share of the government's proceeds."

Unsurprisingly, the man's legal team views his withdrawal in a different light, alleging that their client's action, while ostensibly voluntary, was actually anything but that, and that government officials acted in bad faith in the matter. They vow to appeal the judge's recent ruling against the ex-whistleblower.

The case was grounded in the one-time weapons-company engineer's claim to government authorities in 2013 that his employer was committing fraud by selling faulty weapon sights to the military and police agencies.

After making that claim, the whistleblower fled the country following his conviction in a criminal matter. While abroad in 2014, he filed a qui tam False Claims Act lawsuit as a so-called relator.

Then complexity ensued, with the man's attorneys saying that he would withdraw his filing if he failed to surrender on the criminal charge by a given date. Ultimately, he did surrender his claim, but only after the noted date had passed.

Shortly thereafter, the government filed a suit of its own and quickly settled with the company for more than $25 million.

The ex-relator claimed a portion of the proceeds as a whistleblower, which, as noted, was a failing argument with the judge, given his earlier dismissal of his claim. That action served to "unambiguously preclude" him from sharing in any recovery, ruled the court.

The man's attorneys contend their client's dismissal was coerced by the government, and that the recent ruling establishes precedent for authorities "to take your disclosure and then race you to the courthouse." They contend that denying a recovery for their client undermined "the purpose of the whole qui tam statute."

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