False Claims Act Laws by State

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 The False Claims Act: What Is It?

Organizations or individuals who provide the government with false or fraudulent information face penalties under the Federal False Claims Act. The Act specifically tries to stop claims with the intent to receive money or property from the US government.

Because it dates back to the Civil War, the act is also commonly referred to as the Lincoln statute. This act is the federal government’s finest instrument for eliminating wasteful spending caused by payments that were received fraudulently from the government in a variety of commercial activities. These include:

  • Medical care;
  • Housing; and
  • Contracting.

An illustration of “qui tam” law is the Federal False Claims Act. A qui tam law enables a private individual to “fill the shoes” of the government and file a lawsuit on its behalf.

This means that a person who files a False Claims Act complaint against an employer is entitled to a portion of the money the government wins in court—typically between 15 and 25 percent of the award—as compensation. The False Claims Act also prevents companies from retaliating against whistleblowers who expose wrongdoing. This means that an employer cannot terminate an employee for reporting them or withhold their salary

What is a False Claim?

Under the False Claims Act, a firm may be held accountable for making a false claim if it intentionally presents, causes to be submitted, or conspires with other people to make a fraudulent or false claim for payment from the federal government.

It is not necessary for the government to demonstrate that a defendant intended to cheat the government. It is only necessary to demonstrate that the defendant committed the unlawful act with knowledge.

It is crucial to note that, as indicated above, states may also have false claims legislation. As a result, a corporation or business could be held accountable under both state and federal laws.

The most frequent erroneous statements concern healthcare. For instance, the government may launch a false claim investigation against a pharmaceutical business if it fails to disclose safety data or participates in unlawful off-label promotion.

Another example may include a situation where a medical office submits a claim for Medicare reimbursement for unnecessary procedures or tests that were never performed. Instances of nurses who are aware of these bogus submissions may be reported to the government, which may then try to start the claim itself. The nurse may attempt to pursue the false claim on their own if the government does not start the claim.

Is Making a False Claim Against the Government Punishable?

False or fraudulent claims for money or property can result in legal consequences under the False Claims Act. Additionally, the act makes it illegal to retaliate against some private individuals who support or take part in the investigation and prosecution of instances covered by the act.

What Penalties Apply to False Claims?

For a business, filing a false claim could result in severe penalties and fines. Awards that have been received include, for instance:

  • Thrice the amount of harm to the government;
  • $5,500 to $11,000 per claim as a fine;
  • Monetary penalties; or
  • Payment for the lawsuit’s associated expenses and legal fees.

In some circumstances, a judge may lower the amount of damages given to the government. This could happen if the violation promptly provides the government with all information they were aware of after learning about the false claim and cooperates with the inquiry.

An employee is incentivized to file a whistleblower claim since they are the most qualified to reveal facts that the government would not otherwise be able to learn about. However, merely alerting the government to the fraudulent filing is insufficient for the employee to be compensated under whistleblower laws.

The plaintiff will be compensated to the extent that the qui tam litigation successfully retrieves the money from the violator. An employee may be entitled to between 15 and 30 percent of the amount that the government recovers after a settlement or successful trial, in addition to attorney’s fees and costs.

If a whistleblower litigates a case, the potential compensation is between 15 and 25 percent. The potential compensation ranges from 25 to 30 percent if the government decides to prosecute the case. According to the employee’s level of misbehavior and whether they contributed significantly to the prosecution of the case, a court may reduce the sum given to a whistleblower.

A whistleblower is shielded from retaliatory acts by their company, which serves as another motivation to file this kind of lawsuit. Consider a scenario in which a worker on a government contract for the building of helicopters learns that testing requirements were not properly followed by their employer and that the helicopters in question failed the necessary testing.

Consider as well that the company has submitted a payment request claiming that the helicopters have passed these evaluations. Employees who successfully filed a qui tam lawsuit and did not participate in the intentional submission of fraudulent material will be fully compensated to the extent that the government successfully pursues claims against the employer.

The employee may also pursue further damages if their employer later demotes or fires them in retaliation, such as:

  • The same senior status being reinstated;
  • Two times the sum of back pay and special damages recompense;
  • Interest on the owed wages; or
  • Compensation for certain damages may include legal fees and court costs.

Which Fraudulent Acts Are Covered by the Act?

USC 3729(A)(1) defines actions that are unlawful under US law (7). These are what they are:

Any person who knowingly provides, or causes to be given, to an officer or employee of the United States government, or a member of the United States Armed Forces, a false or fraudulent claim for payment or approval, is subject to liability under subsection (A)(1).

(A)(2) – imposes liability on anyone who knowingly creates, uses, or authorizes the creation or use of a false record or statement to obtain the payment or approval of a false or fraudulent claim from the government.

(A)(3) – establishes liability on anybody who conspires to cheat the government by obtaining the approval or payment of a false or fraudulent claim, but is nowadays rarely used.

(A)(4) imposes liability on any person who has possession, custody, or control of money or property used or to be used by the government and delivers or causes to be delivered less property than the amount for which the person receives a certificate or receipt with the intent to defraud the government or willfully conceal the property.

(A)(5) establishes culpability on any person who, while authorized to prepare or deliver a document verifying receipt of property used or to be utilized by the government, does so without fully knowing that the information on the receipt is correct, although it is also rarely applied in court.

(A)(6) – creates accountability for anybody who intentionally acquires public property that the government hasn’t used since the Civil War from a government officer, employee, or member of the armed forces that is legally prohibited from being sold or pledged.

Any person who intentionally creates, uses, or authorizes the creation of a false record or statement to hide, evade, or lessen a responsibility to pay or send money or property to the government is subject to liability under Section (A)(7).

When pursuing fraud allegations against individuals under this act, the government and private citizens have concentrated on subsections 1, 2, 4, and 7.

States with False Claims Act Laws

The following states have also passed their own versions of a qui tam-style False Claims statute in addition to the Federal False Claims Act:

  • California
  • Connecticut
  • Delaware
  • Washington, DC.
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • Indiana
  • Louisiana
  • Massachusetts
  • Michigan
  • Minnesota
  • Montana
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Oklahoma
  • Rhode Island
  • Tennessee
  • Texas
  • Virginia
  • Wisconsin

Whistleblowers are likewise shielded from reprisal by the False Claims legislation of these states. Many states recently passed laws ensuring whistleblower protection in the context of a healthcare employment setting. For information on the False Claims laws in your specific state, go to your local authorities or a lawyer.

In the Event of a False Claims Issue, Should I Hire Counsel?

You should file a report outlining the events or incidents in full if you have any reason to believe you are a victim of misconduct on the part of your employer. These will be needed if you intend to sue or submit a claim to an administrative body like OSHA.

You should get assistance from a lawyer for wrongful termination in creating the required paperwork.


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