Some companies regularly submit claims that are false to the federal government in an effort to get money to which they are not entitled. This is not a wise practice. The federal False Claims Act is a law that lets private individuals and the government to sue people and entities that submit false claims to the government.

Individuals or companies who are either deliberately ignorant of the falsehood of their claims or who have knowledge that they are false may be liable under the False Claims Act. The penalties for violating the act can be serious. If you have knowledge that your employer is committing fraud against the government, the legal team at Swartz Swidler might be able to help you.

What are the FCA civil penalties and potential damage awards?

Individuals and entities that submit false claims to the government face a civil penalty that ranges from $5,000 to $10,000 per claim that was filed. These penalties are adjusted each year for inflation. As of 2017, businesses or individuals who submit false claims face penalties that range from $10,957 to $21,916 per claim. The government is also able to recover triple the amount of damages that it lost because of the false claim.

This means that a hypothetical business that submits four false claims in the amount of $25,000 each could be penalized with fines of up to $21,916 for each of the four claims along with treble damages of $75,000 per filed false claim. This could total $387,664 that the company could be forced to pay to the government for the $100,000 total in false claims that it submitted.