The False Claims Act: Knowledge is Money

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Knowledge = Money

The False Claims Act: Knowledge is Money


Whistleblower laws have been around since the presidency of Abraham Lincoln. The False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, was enacted by Congress during the Civil War in response to numerous incidents of bribery, corruption and fraud being perpetrated against the Government. https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf.  For example, in one case a government vendor resold to the United States weapons the Government had previously discarded.

Today, the False Claims Act imposes harsh penalties against persons and businesses who submit false and fraudulent claims:

  • Civil Penalties of up to $10,000
  • Three times the amount of damages.

The healthcare business is particularly rife with false claims for Medicare and Medicaid reimbursements and accounted for over 50% of the 4.7 Billion Dollars recovered by the Government in 2016. Other types of false and fraudulent claims include claims for goods and services never delivered, fraud by military and other government contractors,   financial institutions committing accounting fraud, mortgage fraud, double billings for the same goods and services, failing to report and repay Government overpayments, performing unnecessary medical procedure and billings for drugs and medical devices that have not been approved by the FDA. https://www.justice.gov/opa/pr/justice-department-recovers-over-47-billion-false-claims-act-cases-fiscal-year-2016.

The FCA relies upon enforcement by private citizens (“whistleblowers”) under the qui tam provisions of the act.  “Qui tam” is Latin for a person who sues “for the King as well as himself.”  The FCA allows the whistleblower to be awarded up to 30% of the amount of funds the Government recovers.  Obviously, the compensation received by the whistleblower can be significant. The whistleblower is called a “relator” who files a case in Federal Court.  Relators who know of fraud are often afraid or reluctant to come forward and, therefore, the FCA carries strong protections for employees who report fraud being committed by their employers. https://www.whistleblowers.gov/statutes.

Once the case is filed, the case remains sealed (thus protecting the identify of the relator) for 60 days while the Government investigates the case and determines whether it wants to prosecute the case on its own. After 60 days, the case is unsealed to let the relator proceed individually.

Whistleblower laws provide valuable protections for the Government and its taxpayers and offer significant incentives for private citizens to come forward when they have knowledge of fraud.  If you know or suspect your employer or any other businesses or persons are submitting false claims or otherwise committing fraud against the United States government or the State of North Carolina, the lawyers at the Greensboro Law Center have the knowledge and skill to help you properly investigate and file your claim.

 
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