The federal False Claims Act (FCA) allows private whistleblowers (known as “Relators”) who have knowledge of FCA violations to file lawsuits on behalf of the government and, in exchange, receive between 15% and 30% of the government’s eventual recovery.
The FCA and its qui tam provisions were originally enacted during the Civil War, to fight against unscrupulous contractors selling faulty items such as “decrepit mules and rancid rations” to the Union Army. In 1986, Congress revised the FCA and strengthened its qui tam provisions, creating a billion dollar whistleblower industry that has only grown in the 40 years since. In the ten years from 2015 through 2024, the Department of Justice (DOJ) has obtained settlements and judgments (mostly settlements) totaling over $33.5 billion. For that same time period, the Relators themselves (and their attorneys, of course) were awarded over $4.2 billion.
All of this has transformed a Civil War-era statutory provision that was meant to encourage individuals with first-hand knowledge of government fraud to come forward with relevant information into a billion dollar a year industry. One byproduct of that industry is the rise of so-called “serial Relators”; whistleblowers who do not have any first-hand knowledge of wrongdoing, but instead scour publicly-available data to “uncover” potential fraud schemes and capitalize by filing multiple qui tam lawsuits.
The FCA actually contains a provision that, in theory, should prevent this practice: the public disclosure bar. That provision states that the court “shall dismiss” an FCA qui tam action “if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed,” whether in a federal hearing; a federal report, hearing, audit, or investigation; or from the news media. However, because the majority of FCA matters settle before litigation is even commenced, FCA defendants often do not reach the point where they can even raise these and other legal defenses before a neutral decision maker; let alone have the issues adjudicated.
A company called GNGH2, Inc. is one of the latest, most prolific, and most successful, serial Relators. According to a November 2024 New York Times article, the individual behind GNGH2 is a New York lawyer named David Abrams, who has filed dozens of lawsuits across the country related to allegations of fraud affecting pandemic-era programs including the Paycheck Protection Program (PPP). As of November 2024, Abrams and GNGH2 had already been awarded over $1.7 million in Relator’s share for various qui tam cases it had filed. And that was just the beginning.
In February 2025, the government settled a qui tam lawsuit filed by GNGH2 against a Chinese-controlled automotive systems company for over $14 million. In that case, GNGH2 received over $1.4 million. A few months later, in June 2025, we wrote about another GNGH2 settlement, where a German-based audio solutions company agreed to pay over $2.1 million to resolve allegations that it violated FCA by obtaining PPP loans and loan forgiveness under false pretenses. A quick Google search shows various other recent settlements involving GNGH2 and other serial, corporate Relators.
And on August 12, 2025, the DOJ announced yet another settlement in a qui tam filed by GNGH2, this time against three Chinese-owned companies operating under the name BWI, who agreed to pay over $21.6 million to resolve allegations that they violated the FCA by obtaining PPP loans for which they were not eligible. According to the DOJ’s press release, when the BWI entities applied for and received PPP funds, they were each majority-owned and controlled by the Chinese government. The DOJ alleged that they were not eligible for the loans for this reason, as well as the fact that they had too many employees. GNGH2 and Abrams will receive over $2.1 million as part of this latest settlement.
All in all, GNGH2 has received close to $10 million in total Relator share, and it still has dozens of FCA qui tams pending across the country. The case of GNGH2 raises a serious question: are these serial relators advancing the legitimate policies behind the qui tam provisions, or are they abusing the system? With the proliferation of publicly-available data, it is likely that serial Relators like GNGH2 will file even more qui tam lawsuits moving forward, and that more and more serial Relators will emerge. At some point, federal courts or Congress, or both, will have to decide whether this practice is consistent with the FCA’s language and purpose. In the meantime, serial Relators like GNGH2 and David Abrams will likely continue to make millions.
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The attorneys at Chilivis Grubman represent businesses and individuals in connection with False Claims Act investigations and litigation. If you need assistance with such a matter, contact us today.