If you have become aware of internal fraud or illegal activity inside your organization, you might have heard of the False Claims Act, but are unsure how this legislation could potentially affect you.

Whistleblowers should be interested in learning more about the FCA and how it could potentially enable them to receive protections under the law or possible recovery in cases involving certain types of fraud. The qui tam provision of the FCA is one of the most powerful whistleblower laws across the United States.

What Does the FCA Say?

The False Claims Act is described in 31 U.S. Code sections 3729 through 3733. This enables entities and persons who have evidence of fraud against federal programs to sue the wrongdoer on behalf of the U.S. government. The government is eligible to intervene in these actions, but a private plaintiff can proceed on his or her own if the government declines.

What Is A Violation Under The FCA?

Violations can include using a false record or statement to get a claim paid by the U.S. government, colluding with other people to get a fraudulent or false claim paid by the federal government, or knowingly presenting a fraudulent claim for payment or purposefully using a false record or statement to avoid or reduce a requirement to pay money.

Who Can Bring A Qui Tam Action?

An entity or person who has evidence of fraud against federal contracts and programs may be eligible to file a qui tam lawsuit. If another private party or government has already filed an FCA lawsuit based on the same evidence that you have, you cannot bring your own lawsuit.

What Are FCA Civil Penalties?

A violator of the FCA could be held liable for three times the dollar amount that the government is defrauded in addition to civil penalties of between $5,000 and $10,000 for each claim. A plaintiff in a qui tam action could be eligible to recover between 15 and 30 percent of the total recovery from the defendant, whether it’s recovered through a judgment or a settlement.

What Is the Statute of Limitations?

Under the FCA, an action must be brought within the later of these two time periods:

• Six years from the date of violation of the act.
• Three years after the government should have known or did know about the violation.

What Protections Are Available to Whistleblowers Under The FCA?

Any employee who is demoted, discharged, harassed or otherwise discriminated against because of the lawful actions he or she took under the FCA could be entitled to all relief that is necessary to make that employee whole. This can include double back pay, reinstatement, and compensation for special damages.

Why Does A Government Offer FCA Awards?

The government turns to the use of financial incentives in an effort to encourage people who have inside information against fraud against the federal government to step forward without fear of being discriminated against or suffering reprisal.

The False Claims Act is also referred to as the Lincoln Law and is the primary litigation tool that the federal government uses to combat fraud.

The FCA has roots going back to the Civil War in which some people brought forward claims that suppliers of goods to the Union Army were defrauding the government in that process.

This article is not legal advice. It is presented
for informational purposes only.