The False Claims Act and qui tam lawsuits

On Behalf of | Oct 21, 2020 | Firm News |

The False Claims Act is a federal law with a long history. During the American Civil War, fraud against the government by defense contractors prompted its enactment in 1863.

The FCA contains a provision that allows private citizens with knowledge of fraud against the government to bring a qui tam lawsuit on its behalf. While this may pose a risk, it can also benefit the whistleblower if the case is successful.

Liability under the False Claims Act

According to Cornell Law School, to be liable to the government under the FCA, an individual has to have knowingly submitted a false claim to the government for approval or payment or made a false statement or record material to the claim. It is not necessary to prove an intent to defraud the government. All that is necessary is to prove that the individual knew the information was false, acted without regard for its truth or falsity or remained deliberately ignorant of it.

Damages owed the government

If the government sustains damages because of a false claim or statement, the person responsible for it may be liable to pay three times the amount. In addition, the person also has to pay a civil penalty between $5,000 and $10,000. According to the U.S. Department of Justice, these figures represent an adjustment for inflation from the original obligation of $2,000 in civil penalties and double the government’s damages.

Recovery for qui tam suits

A person who files a qui tam lawsuit over a False Claims Act violation acts on both the government’s behalf and his or her own. Therefore, the person filing the lawsuit has the right to receive a portion of the damages that the government recovers if the suit is successful.