CODE OF CONDUCT

PURPOSE

This Code of Conduct has been adopted by the Company, to provide standards by which the Company’s leadership, management, employees and contractors will conduct themselves in order to protect and promote organization-wide integrity.

INTRODUCTION

The Code of Conduct contains Principles stating the goals of the organization and Standards which are intended to provide additional guidance to persons functioning in managerial or administrative capacities. The Principles set forth in this Code of Conduct shall be distributed periodically to all employees in an understandable format. All employees are responsible for ensuring that their behavior and activity is consistent with the Code of Conduct.

Principle 1 – Legal Compliance

The Company will strive to ensure all activity by or on behalf of the organization is in compliance with applicable laws.

The Company will strive to ensure all activity by or on behalf of the organization is in compliance with applicable laws.

The following Standards are intended to provide guidance to employees and management in administrative positions to assist them in their obligation to comply with applicable laws. These standards are neither exclusive nor complete. Employees are required to comply with all applicable laws, whether or not specifically addressed in this Code of Conduct. If questions regarding the existence of, interpretation or applications of any laws arise, they should be directed to the Company’s Compliance attorneys.

It should be noted that the first three above-named individuals are former Assistant United States Attorneys in the Northern District of Illinois. Patrick McDermott, Howard Stone and David McGuire, are former agents of the Internal Revenue Service. Stone, McGuire & Siegel are only compliance attorneys, which should be distinguished from the entity’s other counsel.

Standard 1.1 – Fraud and Abuse

The Company expects its employees to refrain from conduct which may violate the fraud and abuse laws. These laws prohibit, in part, (1) direct, indirect or disguised payments in exchange for the referral of Medicare or Medicaid patients; (2) the submission of false, fraudulent or misleading claims to any government entity or third party payor or any entity that receives federal money for the advancement of a federal program, including: claims for goods or services not rendered, claims which characterize the service differently than the service actually rendered, or claims which do not otherwise comply with an applicable program or contractual requirements; (3) improper retention of any overpayment by a federal or state healthcare government agency which the facility is obligated to return.

Standard 1.2 – Environmental

It is the desire of the Company to manage and operate its business in the manner which respects our environment and conserves natural resources. The Company employees will strive to utilize resources appropriately and efficiently, to recycle where possible and otherwise dispose of all waste in accordance with applicable laws and regulations, and to work cooperatively with the appropriate authorities to remedy any environmental contamination for which the Company may be responsible.

Standard 1.3 – Discrimination

The Company believes that the fair and equitable treatment of employees, residents and other persons is critical to fulfilling its vision and goals and will abide by applicable laws.

It is the desire of the Company to recruit, hire, train, promote, assign, transfer, layoff, recall and terminate employees based on their own ability, achievement, experience and conduct without regard to race, color, religion, sex, ethnic origin, age or disability. Of course, it is recognized that certain union agreements can modify this paragraph.

No form of harassment or discrimination for employees will be tolerated on the basis of sex, race, color, disability, age, religion, ethnic origin, disability or any other classification prohibited by law. Each allegation of harassment or discrimination will be promptly investigated after notice is received by the Company’s Compliance Committee.

Principle 2 – Business Ethics

In furtherance of the Company’s commitment to the highest standards of business ethics and integrity, employees will accurately and honestly represent the Company.

Standard 2.1 – Honest Communication

The Company requires candor and honesty from individuals in the performance of their responsibilities and in communication with our attorneys, auditors and governmental agencies.

Standard 2.2 – Fraud and Abuse (Standard 1.1 above)

Principle 3 – Confidentiality

The Company employees shall strive to maintain the confidentiality of residents and other confidential information in accordance with applicable laws.

The Company and its employees are in possession of and have access to a broad variety of confidential, sensitive and proprietary information. The inappropriate release of this information could be injurious to individuals, the Company’s business partners and the Company itself. Every Company employee has a legal obligation under HIPAA and other rules to actively protect and safeguard confidential, sensitive and proprietary information in a manner designed to prevent the unauthorized disclosure of information.

Standard 3.1 – Resident Information

All Company employees have an obligation to conduct themselves in accordance with the principle of maintaining the confidentiality of resident information in accordance with applicable laws and regulations. Employees shall refrain from revealing any personal or confidential information concerning residents unless supported by the applicable laws. If questions arise regarding an obligation to maintain the confidentiality of information or the appropriateness of releasing information, employees should seek guidance from the Compliance Officer or from the Company’s attorneys.

Standard 3.2 – Proprietary Information

Information, ideas and intellectual property assets of the Company are important to organizational success. Information pertaining to the Company’s competitive position or business strategies, payment and reimbursement information, and information relating to negotiations with employees or third parties should be protected and shared only with employees having a need to know such information in order to perform their job responsibilities. Employees should exercise care to ensure that intellectual property rights, including patents, trademarks, copyrights and software, are carefully maintained and managed to preserve and protect their values.

Standard 3.3 – Personnel Actions/Decisions

Salary, benefit and other personal information relating to employees shall be treated as confidential. Personnel files, payroll information, disciplinary matters and similar information shall be maintained in a manner designed to ensure confidentiality in accordance with applicable laws. Employees will exercise due care to prevent the release or sharing of information beyond those persons who may need such information to fulfill their job functions.

Principle 4 – Conflicts of Interest

Officers, committee members and key employees owe a duty of undivided and unqualified loyalty consistent with applicable state and federal laws to the organization. Persons holding such positions (“covered persons”) may not use their positions to profit personally or to assist other in profiting in any way at the expense of the organization.

All covered persons are expected to regulate their activities so as to avoid actual impropriety and/or the appearance of impropriety which might arise from the influence of those activities on business decisions of the Company, or from disclosure or private use of business affairs or plans of the Company.

Standard 4.1 – Services for Competitors/Vendors

No covered person shall perform work or render services for any competitor of Company or for any organization with which the Company does business or which seeks to do business with the Company outside of the normal course of his/her employment with Company without the written approval of the Compliance Committee, which shall receive the approval of the Company’s CEO. Nor shall any such employee be a director, officer, or consultant of such an organization, nor permit his/her name to be used in any fashion that would tend to indicate a

business connection with such organization without the express written consent of the Compliance Committee.

Standard 4.2 – Participation on Boards of Directors/Trustees

In accordance with the Company’s acquiescence and the applicable state and federal laws:

1. A covered person must obtain approval from the Compliance Committee, which shall receive the approval of the Company’s CEO, to serve as a member of the Board of Directors/Trustees of any organization whose interests may conflict with those of Company.

2. All fees/compensation (other than reimbursement for expenses arising from Board participation) that are received for Board services provided during normal work time shall be paid directly to the Company unless stated to the contrary by the Compliance Committee and the Company’s CEO.

3. A covered person must disclose all Board of Directors/ Trustees activities in a written Conflict of Interest disclosure statement that shall be submitted to the Compliance Committee before any such activity is undertaken, and again annually.

4. The Company retains the right to prohibit membership on any Board of Directors/Trustees where in its sole judgment such membership might conflict with best interest of the Company.

5. Questions regarding whether or not Board participation might present a conflict of interest should be discussed with the Compliance Committee.

Principle 5 – Business Relationships

Business transactions with vendors, contractors and other third parties shall be transacted in accordance with state and federal laws, free from offers or solicitation of gifts and favors or other improper inducements in exchange for influence or assistance in a transaction. In the event that the above applies, disclosure should be made to the Company’s Compliance Officer.

The standards set forth below are intended to guide key employees in determining the appropriateness of the listed activities or behaviors within the context of the Company’s business relationships, including relationships with vendors, providers, contractors, third party payors and government entities. It is the intent of the Company that these standards be construed broadly to avoid even the appearance of improper activity. If there is any doubt or concern about whether specific conduct or activities are ethical or otherwise appropriate, you should immediately contact the Company’s attorneys.

Standard 5.1 – Gifts and Gratuities

It is the Company’s desire to, at all times, obey the law, preserve and protect its reputation and to avoid the appearance of impropriety. There is a substantial risk that free goods or services may be used as a vehicle to disguise or confer an unlawful payment for referrals. Consequently, Standards

for employees and covered persons concerning gifts and gratuities are the same as those governing the ethical conduct of employees of the Executive Branch of the United States Government. (5 CFR Ch. XVI, Part 2635). Accordingly, the facility and staff will abide by the provisions of the Standards Governing the Soliciting, Accepting or Offering of Gifts by Nursing Home Employees and Executives, as set forth in Appendix I.

Standard 5.2 – Workshops, Seminars and Training Sessions

Attendance at local, vendor-sponsored educational workshops, seminars and training sessions which include a meal or meals is permitted. Attendance, at vendor expense, at out of Illinois educational seminars, workshops and training sessions is permitted only with the approval of the Company’s attorneys.

Standard 5.3 – Contracting

All business relations with contractors must be conducted at arm’s length both in fact and in appearance and in compliance with the Company’s policies and procedures.

Standard 5.4 – Business Inducements

The Company employees shall not seek to gain any unlawful advantage through the improper use of payments. Offering, giving, soliciting or receiving any form of bribe, being paid in cash or through a non cash benefit, is prohibited.

Appropriate commissions, rebates, discounts and allowances are customary and acceptable business inducements provided that they do not constitute illegal payments. Any such payments must be reasonable in value, competitively justified, properly documented, and made to the business entity to which the original agreement or invoice was made or issued. Such payments should not be made to individual employees or agents of business entities. Any such payments, where legally appropriate, must be passed on to the appropriate governmental unit.

Principle 6 – Protection of Assets

All employees will strive to preserve and protect the Company’s assets by making prudent and effective use of the Company’s resources and by properly and accurately reporting its financial condition.

The Standards set forth below are intended to guide key employees by articulating the Company’s expectations as they relate to activities or behaviors which may impact the Company’s financial health.

Standard 6.1 – Financial Reporting

All financial reports, accounting records, research reports, expense accounts, time sheets and other documents which are submitted to a governmental agency must accurately and clearly represent the relevant facts or the true nature of a transaction to the best of the preparer’s knowledge. Improper or fraudulent accounting, documentation or financial reporting is contrary to the philosophy of the Company and may be in violation of applicable laws and therefore is strictly prohibited. Any

action(s) that are contrary to Standard 6.1 are subject to immediate disciplinary proceedings, including termination of employment.

Standard 6.2 – Travel and Entertainment

Travel and entertainment expenses should be consistent with the employees’ job responsibility and the organization’s needs and resources. Employees are expected to exercise reasonable judgment in the use of the Company’s assets and to spend the organization’s assets as carefully as they would spend their own. Employees must also comply with the Company’s policies (if one exists) relating to travel and entertainment expense, documentation and approval.

COMPANY EXPECTATIONS

The Company expects each person to whom this Code of Conduct applies to abide by the Principles and Standards set forth herein and to conduct the business and affairs of the Company in a manner consistent with the general statement of principles set forth herein.

Failure to abide by this Code of Conduct or the guidelines for behavior which the Code of Conduct represents may lead to disciplinary action. For alleged violations of the Code of Conduct, the CEO, or other authorized representative of the Company, will weigh relevant facts and circumstances, including, but not limited to, the extent to which the behavior was contrary to the express language or general intent of the Code of Conduct, the seriousness of the behavior, the alleged violator’s history with the organization and other factors which the Company deems relevant. Discipline for failure to abide by the Code of Conduct may range from reprimand, suspension, termination, and that the Federal, State, and local law enforcement authorities could be involved. Prior to administering a disciplinary action for a compliance issue, for example, fraud or abuse, the Company’s management will seek the concurrence of its attorneys. In the event that an employee is covered by the terms of a collective bargaining agreement, discipline shall be in accordance with the provisions of the collective bargaining agreement.

Nothing in this Code of Conduct is intended to nor shall be construed as providing any additional employment or contract rights to employees or other persons.

While the Company will generally attempt to communicate changes concurrent with or prior to the implementation of such changes, the Company reserves the right to modify, amend or alter the Code of Conduct without notice to any person or employee.

APPENDIX I

STANDARDS GOVERNING THE SOLICITING, ACCEPTING OR OFFERING OF GIFTS BY NURSING HOME EMPLOYEES AND EXECUTIVES

IT IS IMPORTANT TO NOTE that the standards governing the soliciting, accepting or offering of gifts by employees are different from those gift standards that apply to executives as used in this Appendix, the term “employees” includes non-executives – Director of Nursing, Assistant Director of Nursing, nurses, nurse’s aides, department heads, MDS Coordinator, among others. The term “executives” includes individuals directly responsible for the effective operation of the nursing facility such as, owners of a management company, board of directors of a management company, owners of a nursing facility, board of directors of a nursing facility, Chief Executive Officers, administrators of nursing facilities, and consultants, among others. The term “professionals” when used here signifies nurses and other types of licensed individuals who are subject to technical training by vendors and outside consultants.

It should be further noted that where value (dollar) amounts are used in this Appendix they reflect value amounts used in the federal regulations applicable to the Hatch Act (the law placing restrictions on gifts to and from federal employees). The Standards described here for employees are even more restrictive than the Hatch Act regulations in that these Standards prohibit nursing facility employees from accepting for themselves individually any gifts from a resident or a member of a resident’s family. In these Standards, value amounts of gifts to or from executives are also based on the Hatch Act regulations, adjusted for inflation as a reasonable upper marker. But even so, the value amounts actually used for executives are in fact substantially less than the calculated increased amounts caused by inflation. Executives’ gift Standards in spirit incorporate the value amounts contained in The Pharmaceutical Research and Manufacturers of America’s (PhRMA’s) marketing code (“Code”) adopted in 2002, and updated effective January 2009, to govern the pharmaceutical industry’s relationships with physicians and other health care professionals. This Code has been cited favorably by the Office of Inspector General of HHS. The 2003 version (revised in 2008 and effective July 1, 2009) of the Ethics Code of AdvaMed, the world’s largest medical technology association, uses the same gift value limitation as the PhRMA Code. The per-person market value of education and training for purposes of these gift Standards has been set at a value substantially less (reasonable cost) than the typical cost of health-care related education and training.

Appearing below are general definitions related to the nursing facility gift Standards, a description of the Standards applicable to employees, and a description of the Standards applicable to executives.

A. Definitions

1. Gifts include any gratuity, favor, discount, entertainment, hospitality, loan, forbearance or services, whether provided in-kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred. Gifts do not include:

a. Modest items such as meals and refreshments, or soft drinks, coffee and donuts, offered other than as part of a meal;

b. Greeting cards and items with little intrinsic value, such as plaques, certificates and trophies, which are intended solely for presentation;

c. Anything for which market value is paid by the receiver.

2. Market Value means the retail cost the receiver would incur to purchase the gift. An offeror or receiver who cannot ascertain the market value of a gift may estimate its market value by reference to the retail cost of similar items of like quality. The minimum market value of a gift of a ticket entitling the holder to food, refreshments, entertainment, or any other benefit is the face value of the ticket, and the maximum market value is the value at which the receiver specifically knows the ticket is being sold.

B. General Standards Applicable to both Employees and Executives

Notwithstanding any exception provided in these Standards, employees and executives shall not:

a. Offer or give a gift to a vendor, or another provider, for the purpose of influencing referrals, patients or business.

b. Accept a gift in return for being influenced in the performance of an employment duty;

c. Solicit or coerce the offering of a gift;

d. Accept gifts from the same or different sources on a basis so frequent that a reasonable person would be led to believe the employee is using his employment status for private gain;

C. Standards Relating to Gifts Given to Only Employees

1. From a resident or from a member of a resident’s family: Employees may not personally accept any gift from a resident or resident family member. Employees must turn over any such gifts to the Administrator of the nursing facility. The Administrator then shall determine the appropriate time and method to distribute such gifts to the staff of the nursing facility as a group (e.g. pizza party). Additionally, the Administrator should be vigilant to find instances where the aggregate value of gifts from any one resident source (e.g. resident’s family or friends) to an employee exceeds $50 in a calendar year. The Administrator may use discretion in prohibiting gifts from one source that exceeds that aggregate dollar limit.

2. An employee who has received, in his or her employment capacity, a tangible or cash gift of any value from a source other than a resident or a member of a resident’s family (e.g. resident source, potential vendor, vendor, service provider, consultant) shall submit the gift to the nursing facility Administrator or his or her superior, who shall determine an appropriate and diplomatic way to handle the situation. If the fair market value of the gift exceeds $50, the Administrator or superior should contact the Facility’s compliance attorneys.

3. For Standards relating to gifts of training or education given to employees by vendors or consultants, see Part E of this Appendix below.

D. Standards Relating to Gifts Given Only to Executives

1. Executives may accept non-cash gifts (medical devices, health care text books, management aids, etc.) from vendors and consultants that do not exceed $100 in fair market value, so long as the purpose of the gifts is to advance the effectiveness of the delivery of health care to

residents of a nursing facility. The aggregate dollar amount of non-cash gifts may not exceed $250 in a calendar year.

2. Executives may not, under any circumstances, accept cash gifts of any amount from potential vendors, vendors, potential consultants, consultants, or any individual or company in a similar relationship with the nursing facilities or executives. Cash payments of any kind create an appearance of impropriety or conflict of interest.

3. For Standards relating to gifts of training or education given to executives by vendors or consultants, see Part E of this Appendix below.

E. Gifts of Training Consisting of Legitimate Health Care Educational Benefit

1. Background. On April 23, 2003, the Office of the Inspector General issued compliance program guidance for pharmaceutical manufacturers and favorably cited The Pharmaceutical Research and Manufacturers of America’s (PhRMA’s) marketing code (“Code”) adopted in 2002 (revised effective January 2009) to govern the pharmaceutical industry’s relationships with physicians and other health care professionals. The Code permits informational presentations and discussions that provide valuable educational benefits. In connection with such presentations or discussions, occasional meals may be offered so long as they: (a) are modest as judged by local standards; (b) are not part of a primarily entertainment or recreational event; and (c) occur in a venue and manner conducive to informational communication and provide educational value. Inclusion of a healthcare professional’s spouse or other guests is usually not appropriate. Financial support should not be offered for the costs of non-local travel, lodging, or other personal expenses of non-faculty healthcare professionals attending Continuing Medical Education (CME) or other third-party educational conferences or professional meetings. Funding should not be offered to compensate for the time spent by healthcare professionals attending the conference or meeting. This guidance is thought also to be relevant to gifts of education or training from nursing facilities to vendors, consultants, and referral sources, and vice versa.

2. Costs of Education Programs for Vendors, Consultants, and Referral Sources. It is reasonable that a nursing facility could spend up to a reasonable amount per person, per program, so long as the number of such programs per year is reasonable and the purpose of the programs is primarily educational for the ultimate benefit of nursing home residents and patients, and the venue and costs associated with the education programs are appropriate as judged by local standards. Listed below are items of value that would be considered to directly relate to educational programs that are (a) modest as judged by local standards; (b) are not part of a primarily entertainment or recreational event; and (c) occur in a venue and manner conducive to informational communication and provide educational value:

* Local transportation costs incidental to the conduct of an educational program;

* Expense of renting a meeting room in an appropriate local hotel with appropriate meal;

* Reasonable costs associated with holding educational meetings at public places like a public garden or the Zoo, etc;

3. Items of value primarily for the education of patients or health care professionals may be offered to referral sources if such items are not of substantial value ($100 or less) and not offered on more than an occasional basis. These items cannot be for personal use. Any questions related to this topic and the interpretation of the OIG’s guidelines should be directed to the Facility’s compliance attorneys.

APPENDIX II

FRAUD PREVENTION POLICY

Purpose

The purpose of this policy is to detect and prevent waste, fraud and abuse in federal and state health care programs in which this facility is involved. It is intended to be consistent with the requirements of Section 6032 of the Deficit Reduction Act of 2005.

Applicability

This policy applies to all employees, contractors and agents of this facility.

Facility Policies and Procedures

This facility has enacted various policies and procedures for the purpose of detecting and preventing waste, fraud and abuse, including the following Code of Conduct and Billing Policy:

Code of Conduct

A copy of the facility’s Code of Conduct is attached, and is a part of this policy.

Billing Policy

Purpose. The purpose of this policy is to promote compliance with applicable laws and regulations governing billing under the health care programs in which the facility participates, including Medicare, Medicaid and private health plans.

Prohibited Conduct. Employees, contractors and agents of this facility are prohibited, in connection with dealings with this facility, from knowingly:

Billing for items or services not provided;

Billing for items or services not properly ordered;

Billing for items or services that are not clinically necessary;

Billing for items or services that do not meet program requirements;

Billing for residents who are not eligible under the program billed;

Billing residents for items or services that are covered by a third-party payer;

Duplicate billing or billing for items or services billed by another provider;

Billing for individual items or services that are included in a separately-billed per diem rate or that should not be unbundled;

Submitting inaccurate information in an MDS assessment, or in any submission used to determine the level of services or payment for, or the eligibility of a resident;

Creating documentation that inaccurately indicates that items or services were ordered, provided or necessary, or that inaccurately describes the level of the services;

Concealing an overpayment for items or services provided for a resident; or

Submitting inaccurate Medicare or Medicaid cost report information.

Compliance. Employees, contractors and agents of this facility are expected to follow this Billing Policy to the best of their ability. Any person who fails to do so will be subject to adverse action.

Monitoring. The facility’s Compliance Committee and Compliance Officer are responsible for monitoring compliance with this Billing Policy.

Role of False Claims Laws

The governments of the United States and the State of Illinois have enacted the laws described below to prevent false claims in federal and state health care programs. Those laws provide authority to investigate and prosecute cases of, and protect individuals who make good faith reports of false claims in those programs.

Federal False Claims Laws

False Claims Act

The federal False Claims Act (31 U.S.C. 3729-3733) imposes liability on any person who knowingly presents, or causes to be presented a false or fraudulent claim, record or statement for payment or approval, conspires to defraud the government by causing a false or fraudulent claim to be approved or paid, or commits one of the other fraudulent acts described in that statute.

Under the False Claims Act, the term “knowingly” includes having actual knowledge that information is false, acting in deliberate ignorance of whether information is true or false, and acting in reckless disregard of whether information is true or false. The term “claim” includes any request or demand for payment if the federal government provides any portion of the money requested or demanded.

A person found liable under the False Claims Act is subject to civil money penalties of between five thousand five hundred and eleven thousand dollars per claim, treble damages, and the costs of any civil action brought to recover the penalties or damages.

The United States Attorney General is empowered to investigate and prosecute violations of the False Claims Act. The statute also permits private persons to bring a civil action in the name of the federal government for a violation of the statute. Actions by private persons remain under seal for a period of at least sixty days. At the end of that period, the government chooses whether or not to pursue the case in its own name. If the government does not pursue the case, the private person may continue it in his or her own name. If the government pursues the case, the private person who brought the action may receive fifteen to twenty-five percent of any recovery. A private person who continues the case in his or her own name may receive twenty-five to thirty percent of any recovery. The party pursuing the action may also recover reasonable expenses, attorneys’ fees and costs. The share of a private person bringing an action under the False Claims Act may be reduced if he or she initiated the violation. No share will be awarded if he or she is found guilty of a crime associated with the violation. If the action is frivolous, clearly vexatious, or brought primarily for harassment, the person bringing the action may be required to pay the defendant’s fees and costs.

Any employee who is discharged, demoted, suspended, threatened, harassed, or discriminated against in terms and conditions of employment because of lawful action taken in furtherance of an action under the False Claims Act may bring a legal action seeking reinstatement, double back pay with interest, other damages, costs and fees. The False Claims Act does not protect the employee if the employee’s action was unlawful or not in furtherance of an action under the statute.

Program Fraud Civil Remedies Act

The Program Fraud Civil Remedies Act (31 U.S.C. 3801-3812) is a statute that imposes civil remedies against any person who presents or causes to be presented to certain federal agencies a claim or written statement that the person knows or has reason to know is false, fictitious or fraudulent.

Under the Program Fraud Civil Remedies Act, the term “knows or has reason to know” includes having actual knowledge that information is false, acting in deliberate ignorance of whether information is true or false, and acting in reckless disregard of whether information is true or false. The term “claim” includes any request or demand for money if the federal government provides any portion of the money.

A person found liable under the Program Fraud Civil Remedies Act is subject to civil money sanctions of five thousand five hundred dollars per claim and an assessment, in lieu of damages, of not more than twice the amount of the original claim.

The federal government is empowered to investigate and, with the approval of the United States Attorney General, commence administrative proceedings under the Program Fraud Civil Remedies Act if the amount sought is less than one hundred fifty thousand dollars.

Illinois False Claims Laws

The State of Illinois has its own false claims statute (Public Act 87-662, 740 ILCS 175/1-175/8) covering claims submitted to the Illinois government agencies. Most important provisions of that statute are substantially the same as or analogous to those in the federal False Claims Act, including the types of claims and actions prohibited, the definitions of “knowingly” and “claim”, and the liabilities of persons found to have violated the statute.

The Illinois Attorney General is empowered to investigate and prosecute violations of the Illinois statute. The statute also permits private persons to bring a civil action in the name of the Illinois government for a violation of the statute. The statute’s provisions pertaining to assumption of control of the case by the State of Illinois and sharing in any recovery are similar to those in the federal False Claims Act.

Another Illinois statute (Public Act 93-544, 740 ILCS 174/1-174/40) prohibits retaliation by an employer against an employee because of certain types of disclosures by the employee pertaining to false claims made to Illinois government agencies. That statute does not protect the employee if he or she did not have reasonable cause to believe that there was a false claim.