False Claims Act Litigation: Fraud against the Government

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 What Is the False Claims Act?

The False Claims Act allows the government to combat fraud by bringing a claim for several damages and penalties. The act also supports government efforts by allowing and enticing private individuals to file a civil lawsuit on the government’s behalf.

Under the Federal False Claims Act, businesses and people that give the government false or fraudulent information risk punishment. The act intends to stop claims specifically made to receive funds or property from the US government.

The act is also known as the Lincoln statute because it originated during the Civil War. The federal government’s best tool for reducing wasteful expenditure is this legislation, which prohibits payments made by the government that were obtained falsely in a variety of commercial activities. These include contracting, housing, and medical care.

The Federal False Claims Act is one example of “qui tam” law. An individual can “fill the shoes” of the government and bring a lawsuit on its behalf, thanks to a qui tam provision.

This means that a person who files a False Claims Act complaint against an employer is entitled to a share of the money the government recovers in court as compensation, often between 15 and 25% of the award. The False Claims Act forbids businesses from taking adverse action against whistleblowers who reveal fraud. This means that a company cannot fire a worker for making a complaint or withhold their pay.

What is a False Claim?

If a company knowingly presents, causes to be submitted, or conspires with others to make a fraudulent or false claim for payment from the federal government, it may be held liable under the False Claims Act.

The prosecution need not prove that the defendant intended to defraud the government. It is only essential to show that the defendant knew what they were doing was wrong.

It is important to remember that, as was said before, states may also have regulations regarding misleading claims. As a result, both state and federal laws may hold a company or firm liable.

The false assertions about healthcare are most common. For instance, if a pharmaceutical company fails to disclose safety information or engages in illegal off-label promotion, the government may open a false claim investigation into it.

Another instance might be when a doctor’s office makes a Medicare reimbursement request for pointless treatments or tests that were never carried out. Nurses who are aware of these false claims may denounce them to the government, which may then attempt to file the claim on its own. If the government does not initiate the claim, the nurse can try to pursue the false claim on their own.

Is it Illegal to Falsely Accuse the Government?

Under the False Claims Act, there may be legal repercussions for making false or fraudulent claims for money or property. A further prohibition imposed by the legislation prohibits reprisals against some private individuals who assist in or participate in the investigation and prosecution of incidents covered by the act.

What Sanctions Are Imposed for False Claims?

Filing a false claim on behalf of a company could result in harsh penalties and fines. Examples of awards made include:

  • Triple the amount of injury to the government;
  • A punishment ranging from $5,500 to $11,000 per claim;
  • Monetary penalties; or
  • Payment of all costs and attorney’s fees related to the lawsuit.

A judge may, in rare cases, reduce the amount of damages awarded to the government. If the offender promptly informs the government of all relevant facts after becoming aware of the false claim and cooperates with the investigation, this may occur.

Since they are best suited to disclose information that the government would not otherwise be able to learn, employees are encouraged to make whistleblower claims. However, in order for the employee to get compensation under whistleblower rules, more than just alerting the government to the fraudulent filing must be done.

If the qui tam lawsuit successfully gets the money back from the offender, the plaintiff will get compensation. In addition to attorney’s fees and costs, an employee may be entitled to between 15 and 30 percent of the amount the government obtains following a successful settlement or trial.

The potential reward for a whistleblower who files a lawsuit is between 15 and 25%. If the government chooses to pursue the case, the potential compensation varies from 25 to 30 percent. The court may reduce the amount awarded to a whistleblower depending on the employee’s level of misconduct and whether they made a major contribution to the prosecution of the case.

Another reason for bringing such a case is that a whistleblower is protected from retaliation by their employer. Imagine a situation where a worker on a government contract for the construction of helicopters learns that testing specifications were not correctly followed by their employer and that the aforementioned helicopters failed the required testing.

Also, consider the fact that the business claims in a payment request that the helicopters have passed these tests. To the extent that the government successfully pursues claims against the company, employees who successfully filed a qui tam complaint and did not take part in the deliberate submission of bogus material will receive full compensation.

If their employer later demotes them or dismisses them in retaliation, the employee may additionally demand further damages, such as:

  • The same senior status being restored;
  • Two times the amount of back pay and special damages compensation;
  • Interest on the unpaid wages; or
  • Legal fees and court costs may be included in compensation for some damages.

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.

Which Fraudulent Acts Are Covered by the Act?

USC 3729 establishes what constitutes a “liable act” under US law. (A)(1)-(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 intentionally 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 in order 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.

Should I Speak with an Attorney?

Contrary to what most people believe, fraud against government claims happen frequently. It will be crucial to get in touch with a fraud attorney if someone is subject to such a claim. These claims are frequently intricate, costly, and subject to severe financial penalties.

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