What is the False Claims Act?

What is the False Claims Act

The False Claims Act is a federal law that makes entities and individuals who present false claims to the federal government in order to receive payment liable. The act includes some qui tam provisions that allow whistleblowers to file civil lawsuits on the government’s behalf against entities and individuals who have violated the act by presenting false claims for payment. If the government is able to recover money because of a qui tam lawsuit that is filed by a whistleblower, the whistleblower is entitled to receive a percentage of the recovery as an award. The federal government has the False Claims Act in place so that fraud committed against the federal government can be prosecuted. In addition, many cities and states have their own lawsuits allowing similar whistleblower actions.

Why the False Claims Act exists

In 1863, President Abraham Lincoln enacted the False Claims Act in response to defense contract fraud. At the time, private companies contracted with the Union to supply Union soldiers with the equipment that they needed to fight the Confederacy. Some of these companies were opportunistic. Many Union soldiers ended up being sent non-working rifles and donkeys instead of the horses and guns that were promised by the companies. The first False Claims Act was passed in order to encourage and reward whistleblowers who came forward with evidence of the private companies’ committing fraud.

The act was amended and strengthened in 1986, and it is considered to be one of the most powerful tools that federal prosecutors have at their disposal for uncovering fraud. The fraud that is committed against the government costs taxpayers billions of dollars on an annual basis. Today, the most frequently occurring types of fraud are healthcare fraud, including pharmaceutical, Medicaid and medicare fraud, anti-kickback statute violations and Stark Law violations. Others include education fraud and mortgage fraud. All of them are difficult for the government to discover without the help of whistleblowers who file qui tam lawsuits against the wrongdoers.

How to stop violations of the False Claims Act

If you know that a business or individual is submitting false claims to the federal government for payment, you may want to schedule a consultation with the attorneys at Swartz Swidler. We can review the evidence that you have of the violation and offer you an honest assessment of the apparent strength of your claim. If you have a winnable case and are successful, you may recover a substantial monetary award from the government if it is able to recover money because of your qui tam action.