Ground Report

What is the federal false claims act?

The False Claims Act, or FCA — often termed the “Lincoln Law” — places liability on persons and corporations who defraud government programs. This is the government’s main litigation tool to combat fraud.  A key portion of the statute includes the qui tam clause.

Between 1987 and 2013, the government recovered $40 billion under the FCA. Of that, around 70% was generated by qui tam cases.

Qui Tam

Qui tam lawsuits are whistleblower proceedings brought under the FCA. The term is short for the Latin phrase, “qui tam pro domino rege quam pro se in hac parte sequitur.” Roughly translated, it means, “He who brings an action for the king as well as for himself.”

Qui tam cases have proved powerful as a method to help the government stop fraud, and recover millions of dollars, if not billions.

If a qui tam case is successful, the plaintiff may receive a reward. Unique circumstances of the case, how it was presented and in what time frame can all be blended in the recipe which determines the reward amount.

Once a qui tam case is filed under the FCA, the case is sealed for sixty days. Courts often extend the seal multiple times to give the government enough time to investigate the allegations with an eye toward joining the case.

Penalties

Anyone turning in a false claim  to the government needs to think twice. The FCA  is a federal law which makes room for the federal government to sue anyone making fraudulent government claims. The government isn’t the only entity which can sue — even private individuals can — and they get a piece of the pie if the suit is successful.

To be liable under the FCA, anyone violating the law must have personal knowledge or willful ignorance that their claim is false. An inadvertent typo isn’t enough, but someone who knowingly submitted a fraudulent claim will face tough penalties.

A person who submits fraudulent claims is subjected to penalties between $5,000 and $10,000 for each claim. As the Act permits inflationary adjustments, violators may face penalties between $10,000 and almost $22K.

FCA Related Crimes

The actions giving rise to liability under the FCA usually violate criminal law. In addition to civil penalties, prison time could be in the future for anyone committing an FCA offense.

The Takeaway

Fraudulent claims take taxpayer dollars, which could be put to use helping America’s disadvantaged. The FCA is just one deterrent, but whistleblowing can be complex, particularly if you work for the agency engaged in the fraud.

Speak to an attorney who is familiar with the federal False Claims Act. Guard your rights and ensure they are protected.