When a Qui Tam Case Goes Criminal: Insights from Peter Katz and TAF

December 29, 2025

Peter Katz recently joined Nicolas Mendoza of the Anti-Fraud Coalition to discuss a critical issue facing whistleblowers and their counsel: what happens when a civil False Claims Act case crosses into criminal territory. Drawing on his experience as a former state and federal prosecutor, Peter explained that many whistleblowers initially come forward simply to stop wrongdoing, often without understanding whether their case will remain civil or become criminal.

In fact, most individuals who report fraud do not even know what the False Claims Act is when they first seek legal help. Their most common concern is whether the individuals or companies they report will face criminal prosecution. Individuals considering reporting fraud should speak with experienced counsel, and our whistleblower attorney services help clients understand their rights, risks, and protections before taking any action.

When Civil Fraud Becomes Criminal

As Peter emphasized during the interview, whether a qui tam case becomes criminal “depends” on the facts. Federal prosecutors evaluate the severity of the alleged fraud, who benefited financially, and whether individual actors—as opposed to large institutions—were primarily responsible. Criminal prosecution is more likely when fraud involves individuals or smaller entities rather than large corporations, although no rule is absolute.

Peter also addressed a common fear among whistleblowers: losing control after reporting misconduct. When a whistleblower files a False Claims Act case, the government—not the whistleblower—ultimately decides whether to pursue civil enforcement, criminal charges, or both. Prosecutors typically focus on those who directed or profited from the fraud, not low-level employees or individuals on the periphery, though investigations can expand depending on the evidence.

Prosecutorial Discretion and Parallel Investigations

Another key insight from the conversation involved parallel investigations. When a civil False Claims Act case becomes criminal, the civil case is usually stayed while prosecutors pursue criminal charges. Although this interruption could delay the resolution and payment of a whistleblower award, it often enhances the complete case. Criminal convictions require a higher burden of proof, and once achieved, they make civil liability far easier to establish. Effective qui tam representation is critical at this stage, as the government—not the whistleblower—ultimately decides whether a case proceeds civilly, criminally, or on parallel tracks.

How the Government Handles False Claims Act Cases

Peter also explained how U.S. Attorney’s Offices handle these cases internally. Civil and criminal divisions operate separately but often coordinate early in an investigation. While both sides may jointly interview whistleblowers and review evidence, criminal prosecutors have tools—such as grand juries—that are unavailable to civil attorneys. Information gathered through grand jury subpoenas must remain confidential and walled off from civil teams, which affects how investigations proceed.

The interview also clarified misconceptions about whistleblowers testifying before grand juries. Based on Peter’s prosecutorial experience, whistleblowers are rarely required to appear. Federal indictments are typically supported by summary testimony from case agents rather than witnesses, even when whistleblowers supply crucial information.

Whistleblower Rights and Criminal Case Impact

One of the most complex issues discussed was the impact of criminal cases on whistleblower awards. When funds are recovered through criminal fines, forfeiture, or restitution, those monies are treated differently under the False Claims Act. Depending on the district, how funds are classified can greatly affect whether and how much a whistleblower receives. When allegations escalate, individuals and businesses may also require strong fraud defense to protect their rights during criminal investigations and enforcement actions.

Ultimately, Peter noted that most whistleblowers value accountability over speed or financial recovery. While criminal prosecutions may slow the process, they often validate the whistleblower’s efforts and confirm meaningful consequences for those responsible.

Why Experience on Both Sides Matters

This interview highlights why whistleblowers benefit from working with attorneys who understand both sides of the system. Learn more about how our whistleblower attorney services guide clients through civil and criminal fraud investigations.

Peter Katz’s background as a former prosecutor allows him to advise both whistleblowers and defendants facing government scrutiny, combining whistleblower attorney services, qui tam representation, plus strategic fraud defense under one practice.