What is the Puerto Rico whistleblower law (The False Claims to Government of Puerto Rico Programs, Contracts, and Services Act)?
The Puerto Rico whistleblower law, called the False Claims to Government of Puerto Rico Programs, Contracts, and Services Act, is a statute based on the federal False Claims Act that allows whistleblowers to file “qui tam” lawsuits against those who knowingly present false or fraudulent claims for payment to the state, misappropriate state property, or deceptively conceal or avoid binding obligations to pay the state, among other violations.
Fines under the Puerto Rico whistleblower law
A defendant may be ordered to pay up to three times the actual harm to the state, plus civil fines for each violation of the Act.
Rewards under the Puerto Rico whistleblower law
A whistleblower filing a Puerto Rico False Claims Act case may receive between 15% and 25% of amounts recovered if the state intervenes and prosecutes the matter. If the state does not intervene and the whistleblower successfully prosecutes the case, the whistleblower may receive between 25% and 30% of the award. The court may reduce the value of the award if the whistleblower planned and initiated the fraud or if the action is largely based on readily accessible information.
Protection from retaliation under the Puerto Rico whistleblower law
The Puerto Rico False Claims Act protects whistleblowers who suffer employment retaliation because of their whistleblowing through the Anti-Corruption Code for a New Puerto Rico and applicable federal laws. Protection includes triple back pay and compensation for special damages, including mental anguish, sustained as a result of the retaliation.
Time limits (statute of limitations) under the Puerto Rico Whistleblower Law
Whistleblowers must generally file a qui tam complaint within six years of the violations they are reporting, but the time for filing may be extended in certain cases to up to ten years.
[Updated January 2022]
Puerto Rico whistleblower law: False Claims to Government of Puerto Rico Programs, Contracts, and Services Act
P.R. Laws Ann. tit. 32 § 2934 Violations
Subject to subsection (2) of this section, any person who:
(a) Knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval of benefits under any Government Program or under a service contract;
(b) Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim under any Government Program or under a service contract;
(c) Conspires to commit a violation of clauses (a) and (b) of this subsection; and/r
(d) Knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property, relating to any Government Program or any service contract, as defined in this chapter, shall be liable to the Government for a civil penalty of not less than eleven thousand one hundred eighty-one dollars ($11,181) and not more than twenty-two thousand three hundred sixty-three dollars ($22,363). These penalties shall be adjusted automatically every year in accordance with the provisions of the Federal Civil Penalties Inflation Adjustment Act of 2015 to be consistent with those authorized under the Federal False Claims Act, 31 USC §3729(a). In addition to this civil penalty, said person shall be subject to three (3) times the amount of damages which the Government sustains because of the fraudulent acts of that person.
(2) However, if the court finds that:
(a) The person committing the violation of clauses (a) through (d) of subsection (1) of this section, furnished officials of the Government responsible for investigating false claims violations with all information known to such person about the violation within thirty (30) days after the date on which the date such person first obtained the information;
(b) Such person fully cooperated with any state or federal investigation of any violation of clauses (a) through (d) of subsection (1) of this section, as certified by the Department of Justice; and
(c) At the time such person furnished the Government with the information about the violation of clauses (a) through (d) of subsection (1) of this section, no criminal prosecution, or civil action, or administrative action had commenced under this chapter, and the person did not have actual knowledge of the existence of an investigation against him for such violations.
In these cases, the court may reduce from three (3) to two (2) times the amount of damages which the Government sustains because of such acts.
(3) A person violating clauses (a) through (d) of subsection (1) of this section shall also be liable for attorney’s fees and the costs incurred to recover any such civil penalty and/r damages.
(4) Any person who agrees or intends to perform any act described in clauses (a) through (d) of subsection (1) of this section shall be brought before the Court of First Instance, San Juan Part, in a complaint filed by the Secretary or the person designated by him. Said complaint shall be filed on behalf of the Government and shall be granted if it clearly shows that the rights of the Government have been violated by said person or entity and that the Government shall sustain imminent and irreparable damage, harm, or loss pending a final judgment resolving the dispute, or that the acts or omissions of such person or entity render inefficient said final judgment. The court may enter judgments or orders, including the appointment of a receiver, as necessary to prevent any of the acts described in clauses (a) through (d) of subsection (1) of this section by any person or entity, or as necessary to return to the Government any money or real or personal property that may have been acquired through such acts.
P.R. Laws Ann. tit. 32 § 2934a Civil actions; who may bring civil actions
(1) If the Secretary or his designee finds that a person has violated or is violating § 2934 of this title, the Secretary or his designee may bring a civil action against the person.
(a) Any person may bring a civil action and file a complaint in his capacity as relator for a violation of § 2934 of this title in the name of the Government. All actions shall be brought in the name of the Government. Such action may be dismissed without prejudice only if the Secretary or his designee give written consent to the dismissal and their reasons for consenting.
(b) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government, through the Secretary, on the filing date thereof, by the person who filed the complaint with the court on behalf of and in the name of the Government. The complaint shall be filed with the Court of First Instance, shall remain under seal for at least sixty (60) days, and shall not be served on the defendant until the court so orders. In the complaint, the relator shall certify under penalty of perjury that he did not obtain information from the persons precluded from filing a complaint under subsection (g) of § 2931a of this title. The Government may elect to intervene in the process, substitute the complainant and proceed with the action within sixty (60) days after it receives the complaint and the necessary evidence and information for the Secretary to investigate the information reported. The court may extend the sixty (60)-day term for the Government to issue its decision whether or not it shall intervene; provided, that the Secretary or his designee requests such extension showing good cause to continue the investigation before deciding whether to intervene.
(c) Before the expiration of the sixty (60)-day period or of any extension, the Government may:
(i) Proceed with the action, in which case it shall be conducted by the Government.
(ii) Notify the court that it shall not assume jurisdiction of the civil action, in which case, the person bringing the action shall conduct the action.
(iii) The Secretary or his designee shall have full discretion to make a decision of whether to intervene in any case brought under this chapter by any private citizen, and such decision shall not be subject to judicial review nor challenge by the petitioner.
(d) When a private person brings an action, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.
(3) If the Government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person who originally brought the action.
(a) The Government may dismiss the action at any time pursuant to subsection (2)(a) of this section notwithstanding the objections of the person initiating the action. A copy of the motion stating the reasons for the dismissal of the action must be served on the person who brought the action. Upon notice of the motion, the person who brought the action shall have fifteen (15) days to oppose the dismissal of the action. In this case, the court shall hold a hearing within a term of twenty (20) days after the objection of the person who brought the action is received and notified.
(b) The Government may settle the action with the defendant notwithstanding the objections of the person bringing the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable.
(4) If the Government elects not to proceed with the action, the Secretary may allow the person who initiated the action to conduct the action before the court on behalf and in favor of the Government. If the relator is authorized to proceed with the action, he shall not be authorized to settle the claim on behalf of the Government, until the settlement proposal or motion to dismiss is filed with the Secretary or his designee for approval. Any payment for a transaction shall be made to the name of the Secretary of the Treasury of Puerto Rico. Any compensation awarded to a relator shall be subject to agreement between the relator and the Government. If the Government elects not to proceed and allows the relator to continue with the litigation, the Secretary may require to be served of all pleadings filed and be supplied with copies of all the evidence presented, including deposition transcripts at the relator’s expense. If the relator prevails in the action, in addition to the compensation awarded to him for the referral and transaction, the relator may request the reimbursement of necessary and reasonable expenses which he has incurred and have not been awarded by the court as attorney fees and costs. If the Government elects not to proceed and the relator continues with the litigation, the Government shall not be liable to the relator nor the defendant for any attorney fees. Once the cause of action is initiated, the court may permit the Government to intervene at a later date upon showing good cause and through an express request from the Secretary or his designee. The court shall not have jurisdiction to require the Secretary or his designee to intervene in certain action. Likewise, the Government may request the court to limit the number of the relator’s witnesses, testimonies, and cross-examination if the Government believes that the relator’s unrestricted participation would affect a criminal investigation related thereto or if it believes that not doing so would result in repetitious or irrelevant testimonies or would unduly delay the process.
Whether or not the Government or the person who brought the action proceeds with the action, the court, at the request of the Government, may stay discovery for a period of not more than sixty (60) days if the Government shows that all or part of discovery would interfere with an investigation or prosecution of a criminal or civil matter arising out of the same or similar facts. The hearing to request the stay of discovery shall be held in camera. The sixty (60)-day period may be extended at the request of the Government if the court determines that it has acted in good faith and that continuing with discovery shall interfere with other ongoing investigations.
P.R. Laws Ann. tit. 32 § 2934b Compensation
(1) If the Government proceeds with an action, the person who brought the complaint or the relator shall be entitled to receive at least fifteen percent (15% ) but not more than twenty-five percent (25% ) of the proceeds of the action received by the Government for violations of the Government program or service contract, as the case may be. Provided, that the relator shall be entitled to such compensation once the Government enforces the judgment or settlement agreement and has received the payment. Until the Government receives payment, the relator shall not be entitled to collect his share of the proceeds. Absent an agreement between the Government and the relator, the court shall establish the percentage of the proceeds set forth in this section that the person who brought the complaint shall receive.
(2) If the court finds that the participation of the person who brought the action or the relator was based on information readily accessible to any person rather than a rigorous investigation, it may fix a compensation of ten percent (10% ) of the amount received by the Government under the judgment or settlement agreement.
(3) Any payment to the person bringing the action on behalf of the Government shall be made from the proceeds of the judgment or settlement agreement. Except that, if the Government receives partial payments under a judgment or settlement agreement, the relator may only be entitled to receive the percentage awarded as compensation from the payment received. The court may impose additional fees to the defendant for reasonable additional costs which the person bringing the action had incurred, such as attorney fees. The person bringing the action shall file with the court an itemization of the expenses incurred, within fifteen (15) days after the date of the judgment or settlement agreement.
(4) If the Government does not proceed with an action, the relator shall receive not less than twenty-five percent (25% ) and not more than thirty percent (30% ) of the amount of the judgment as determined by the court, in addition to any reasonable and necessary expenses incurred in the litigation, under the same collection parameters for the Government stated in the above subsection. The relator shall file with the court an itemization of such expenses, within fifteen (15) days after the date of the judgment or settlement agreement.
(5) Regardless of whether it was the Government or the relator that conducts the action, if the court finds that evidence was presented indicating that the Relator conspired, participated, or aided in the commission of the violation of the Government program or service contract, the share from the proceeds of the judgment or settlement agreement shall be reduced by five percent (5% ). If, as a result of the conspiracy, participation, or aid in the commission of the violation of the program or service contract, the Government files criminal charges against the person bringing the action, the relator shall be dismissed from the action as the Government’s representative and shall not receive any share of the proceeds of the judgment or settlement agreement arising from his referral. The Government may, however, continue with the cause of action at the discretion of the Secretary or his designee.
(6) If the Government does not proceed with an action and the court finds that it lacks merit, the court shall impose fees for recklessness, as necessary, on petitioner. The defendant shall have fifteen (15) days from the date the court enters or dismisses the action to submit to the court an itemization of the reasonable fees and expenses incurred.
(7) The Government shall never be liable for expenses incurred by the relator in bringing the action or conducting the action in benefit of the Government. If the relator prevails in the action, the relator may be reimbursed such necessary and reasonable expenses in connection with the action, excluding any sums for attorney’s fees incurred by the relator which shall not be reimbursable by the Government.
(8) No relator shall be compensated by the Government for having referred a fraud or false statements for investigation, which has not been brought in court as a Qui Tam action.
P.R. Laws Ann. tit. 32 § 2934c Collateral estoppel
(1) In no event may a person bring an action which is based upon allegations or transactions which are or were the subject of a civil suit or an administrative civil money penalty proceeding in which the Government was already a party.
(a) The court shall dismiss an action if the allegations or transactions as alleged in the action or claim, series of events, or actors are substantially the same. In these cases, the Government may bring the action at its discretion.
P.R. Laws Ann. tit. 32 § 2934d Rights of the relator
Any person, employee, contractor, or agent shall be entitled to bring a complaint as relator if he knows of the existence of a violation of this subchapter, unless expressly prohibited by subsection (g) of § 2931a of this title. If such employee, contractor, or agent is discharged, demoted, suspended, threatened, or otherwise discriminated against in the terms and conditions of employment for bringing an action, such employee shall be entitled to the protections of §§ 1884-1884f of Title 3, known as the ‘Anti-Corruption Code for a New Puerto Rico,’ and the applicable federal laws.
P.R. Laws Ann. tit. 32 § 2934e Subpoena and statute of limitations
(1) A subpoena requiring the attendance of a witness at a proceeding arising from the provisions of this chapter may be served in Puerto Rico or any other state or territory of the United States of America, as provided in the Puerto Rico Rules of Civil Procedure.
(2) A civil action under the provisions of this chapter may not be brought:
(a) Six (6) years after the date on which the violation of the Government program or the service contract is committed, in accordance with the provisions of this chapter.
(b) Within three (3) years after the date when the allegations of potential violations are known by the Government, regardless of the fact that the six (6)-year term of clause (a) of this subsection has elapsed, but in no event more than ten (10) years after the date on which the violation is committed.
(c) If evidence is presented indicating that the violation constituting fraud or a false statement occurred during a conspiracy, the statute of limitations shall begin to elapse when the last act of the conspiracy takes place.
P.R. Laws Ann. tit. 32 § 2934f Criminal action
A civil action under the provisions of this chapter shall not preclude the Government from bringing a criminal action based on the same facts of the civil action or to proceed with administrative remedies before the concerned government entities.
P.R. Laws Ann. tit. 32 § 2935 Jurisdiction and competence
The Court of First Instance, Superior Part of San Juan, shall be the primary and exclusive forum where criminal actions shall be brought by the Medicaid Fraud Control Unit. In addition, it shall be the forum where complaints for violations of Government Programs or service contracts shall be brought under the provisions of this chapter, regardless of the judicial region where the fraud or false statement occurred.
P.R. Laws Ann. tit. 32 § 2933 Referrals and investigations
The Unit shall receive referrals of suspected or potential fraud in the Medicaid Program in Puerto Rico from the State Medicaid Agency, the Health Insurance Administration, affected beneficiaries and/r outside sources. Depending on the nature of the allegations, the Unit Director shall order an investigation, refer the matter to the competent body, or order the dismissal thereof if he determines that no further action is required. The Unit shall notify in writing the decision of whether to accept or deny a referral. If the initial review of the referral does not show sufficient basis for criminal prosecution, the Unit shall transfer the matter to the appropriate agency for analysis and determination. Likewise, the Unit shall have access to the Medicaid Management Information System (MMIS) of Puerto Rico as part of the investigative duties thereof. The Units shall also have access to the Prescription Drug Monitoring Program (PDMP) for the same purposes.
The Unit may also refer to both the State Medicaid Agency and ASES for the potential suspension of payment to any provider with respect to which an investigation has been initiated for material and credible allegations of Medicaid fraud. Likewise, if in the discharge of the delegated duties relating to the initial review, the Unit finds that there was an overpayment in favor of a healthcare facility or another provider of medical assistance under the Medicaid Program, the Unit shall initiate the pertinent collections actions or refer the matter to the appropriate agency.