The False Claims Act
The False Claims Act (“FCA” or the “Act”) prohibits businesses and individuals from defrauding the government by knowingly presenting, or causing to be presented, a false claim for payment or approval. Violations of the Act can result in a judgment equal to three times the losses sustained by the government, plus civil penalties of $5,500 to $11,000 for each false claim. In cases that settle before trial, however, the recovery is typically less than three times the government’s loss.
The FCA has proven to be one of the most effective laws to recover money that has been taken from the government through fraud. Almost any type of fraud falls under the False Claims Act. Many successful cases have involved Medicare/Medicaid, veterans’ benefits, government contracts, and defense contracts, while others have involved federal funding for, among other things, environmental, energy, farm and education programs.
Notably, the FCA does not cover tax fraud and securities/commodities fraud. Blowing the whistle on tax fraud is covered by the Tax Relief and Health Care Act of 2006, and blowing the whistle on securities/commodities fraud is covered by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Both acts offer whistleblowers the opportunity to report violations of the tax and securities/commodities laws and receive a reward for helping the government recover the money lost due to fraud or other illegal conduct.
The False Claims Act rewards whistleblowers (also known as “relators”) who successfully recover funds on behalf of the government. A person who brings a successful “qui tam” action can receive between 15% and 30% of the government’s recovery depending upon whether the government intervenes in the action. If the government intervenes, the award generally falls between 15% and 25% of the government’s recovery. If the government declines to intervene and the whistleblower pursues the action alone, the award generally falls between 25% and 30% of the government’s recovery.
In addition to the payment of an award, the FCA includes an anti-retaliation provision that protects whistleblowers from workplace retaliation. The Act prohibits retaliatory acts such as, termination, suspension, demotion, harassment or any form of discrimination. Employers who violate the FCA’s anti-retaliation provision are subject to substantial financial penalties for actions taken against an employee, contractor or agent who reports fraud under the Act.
Whistleblowers perform a vital public service. They assume great risk to their reputation and financial security. Accordingly, they need an experienced law firm, like Freiberger Haber LLP, to ensure that they receive the rewards and protections to which they are entitled under the law. If you know of a violation of the False Claims Act, you can share your concerns in a confidential manner. The firm will help you understand and explore your options in blowing the whistle on fraud.