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False Claims Act Penalties

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False Claims Act Penalties

The False Claims Act, also called Lincoln Law, is a federal law that seeks to stop fraudulent claims for payment being sent to the U.S. federal government. False claims can also be violated under state law. An individual who suspects a business of knowingly providing the government with fake charges can file a lawsuit.

What Are Penalties under the False Claims Act?

According to the False Claims Act, a defendant found guilty of providing false claims may be subjected to penalties. These penalties include:

  • General liability for three times the damages the government sustained because of the fraud claims
  • Liability for $5,000 to $10,000 for each false claim that the defendant made to the government

Is the Plaintiff Compensated in the Lawsuit?

Whether a plaintiff is compensated depends on whether the U.S. Justice Department takes over the case. After a case is filed, the Justice Department takes a look at the case. This is prior to the complaint being sent to the defendant. It may decide to prosecute the case. In other words, take the case from the plaintiff and prosecute the defendant on behalf of the government.

The citizen plaintiff who initiated the action will receive:

  • 15 to 25 percent of the money received. This is if the Justice Department prosecutes the case.
  • 25 to 30 percent of the money received. This is if the citizen remains the plaintiff on the case.

For example, if a person initiates a lawsuit under the False Claims Act, they will receive 15 percent of any damages if the Justice Department prosecutes the case. If the citizen’s attorney litigates the case, then they will get 25 percent.

Should I Talk to an Attorney about False Claims Act Penalties?

False claims against the government is common. If you want to know more about False Claims Act penalties, consult a business attorney. An attorney will be able to explain the Act and how to proceed with a claim.

Photo of page author Taelonnda Sewell

, LegalMatch Legal Writer

Last Modified: 04-14-2015 04:42 PM PDT

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