Federal False Claims Act

 

What is the False Claims Act?

 

The federal False Claims Act (FCA) is designed to protect federal government money – namely, taxpayer dollars. Under the FCA, it is unlawful for any person or entity to submit, or cause another party to submit, false claims for payment using government money. Persons or entities who violate the FCA are liable for three times the amount of money that was paid out by the government due to the fraud. Wrongdoers may also have to pay civil penalties or fines.

 

The FCA contains a whistleblower provision, which grants a private person with knowledge of fraud against the federal government standing to file a lawsuit on behalf of the government against the wrongdoers. The whistleblower bringing the suit is usually referred to as the “relator”. FCA lawsuits filed by private individuals – as opposed to the government – are also known as “qui tam” suits. Qui tam is short for the Latin phrase qui tam pro domino rege quam pro seipse, which, roughly translated, means “he who sues for the King as well as for himself.” If the lawsuit is successful, it not only stops the dishonest conduct but also sends a strong warning message to other would-be fraudsters. In addition, the Relator is eligible to receive a portion of the government’s recovery – between 15 and 30 percent of the total amount recovered.

 
Such qui tam lawsuits have a long history in the United States. The original FCA was championed by President Abraham Lincoln and signed into law in 1863 during the Civil War. It was initially designed to stop fraud against the Union Army by unscrupulous contractors who sold lame horses, rotting food, and gunpowder laced with sawdust to the troops. Since the Government’s resources at the time were already strained by the war efforts, there was no one available to police such fraud. Therefore, the FCA gave private individual incentive to report the fraud.
 

Today, the False Claims Act remains a key weapon in the government’s battle against fraud – each year, the government recovers billions of dollars with the assistance of courageous whistleblowers who report wrongdoing. As a result of the many successes of the federal FCA, approximately 30 states (and the District of Columbia) have enacted their own False Claims Act laws to protect state funds, including state Medicaid programs.

 

What is an example of a false claim?


The key a successful False Claims Act case is that there must be federal money involved. This can include money from federally-funded health care programs, such as Medicare or Medicaid; or money from government contracts, such as through the Department of Defense or Department of Transportation.

Fraud against the government can take many forms. In recent years, the most extensive and popular kind of is against federal health care programs such as Medicare and Medicaid. Fraudsters also submit false claims to the armed forces and Housing and Urban Development (HUD), along with other government agencies. For specific examples of fraud, please visit our Health Care, Government Contracting, Mortgage, and SEC/IRS pages.
 
I Think I May Have a Case. What Should I Do?
 
If you know of fraud against the government, or think you may have a potential FCA case, please contact us at (248) 539-7420 to set up a complimentary consultation. Please note that it is important to act promptly. Certain events, such as a public disclosure of the fraud or someone filing suit before you, may prohibit you from later filing a lawsuit.
 
It is not uncommon to be worried about reporting fraud, or concerned that you may lose your job. We will work with you to explore your options and help you to preserve any rights you may have as a whistleblower. All information that you share with us will be kept completely confidential.
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