Malhotra v. Steinberg

Plaintiffs filed a qui tam action against their bankruptcy trustee and others under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that the trustee presented fraudulent claims to the bankruptcy court in order to obtain payment of the $60 trustee's fee. The court held that the deposition of the trustee's realtor, James Grace, constitutes a public disclosure as to plaintiffs where plaintiffs were outsiders to the administrative investigation conducted by the Trustee's Office, which was entirely independent of plaintiffs' own investigation. Subject matter jurisdiction did not exist because plaintiffs were not the original source of the information under section 3730(e)(4)(B). Accordingly, the court affirmed the district court's dismissal. View "Malhotra v. Steinberg" on Justia Law