THE FALSE CLAIMS ACT is a federal statute that allows private citizens to blow the whistle on fraud against the government by filing a false claims or qui tam action on behalf of the federal treasury. Known as Lincoln’s Law, the False Claims Act affords protection of the whistleblower’s identity from the defendant during the entire investigation.
During the Civil War, corrupt military contractors were defrauding the United States Army out of hundreds of thousands of dollars and putting troops at risk by supplying troops with defective products and faulty war equipment. Illegal price gouging was a common practice and the armed forces of the United States suffered. In response, Abraham Lincoln enacted the Federal Civil False Claims Act. A key provision of the act was known as qui tam.
The statute, first passed in 1863, includes an ancient legal device called a “qui tam” provision. This provision allows a private person, known as a “relator,” to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The relator need not have been personally harmed by the defendant’s conduct.
WHO CAN FILE A FALSE CLAIMS ACTION:
In order to file a false claim suit, federal funding must be involved, and the fraud alleged must be substantial and non-frivolous in nature. Any person or entity with evidence of fraud against federal programs or contracts may file a false claim a qui tam lawsuit. The person or entity filing the complaint is often referred to as a whistleblower or relator. These suits may be brought by current or former employees, competitors, subcontractors, state and local governments, public interest groups, corporations and private organizations.
A private citizen or company cannot file a qui tam action without an attorney. Because the U.S. government is obligated to investigate all filed qui tam cases, the law requires the whistleblower to have an attorney to file the case as a screening mechanism against frivolous, trivial, or meritless cases.
ACTIONS CONSIDERED VIOLATIONS OF THE FALSE CLAIMS ACT:
- Knowingly using, or causing to be presenting, to the federal government a false or fraudulent claim for payment.
- Knowingly using, or causing to be used, a false record or statement to receive a claim paid by the government.
- Conspiring with others to receive a fraudulent claim paid by the federal government.
- Knowingly using, or causing to be used, a false records or statements to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.
- For example, upcoding a Physician’s office visit from a ten minute level 2 visit to a 45 minute level 5 visit to obtain more medical money.
- For example, submitting a certificate of compliance with an applicable federal law in order to get an invoice paid while knowing the company is not in compliance with the federal law.
- For example, contractors and subcontractors on a defense contract agreeing to use substandard parts and unqualified laborers to build equipment for the Navy so both can make more money.
- For example, undervaluing the value of oil or gas at the wellheads on an MMS 2014 report in order to decrease the federal royalty owed to the government.
TYPES OF WHISTLEBLOWER CASESMilitary and Department of Defense Contractors Medicare Fraud or Fraud in Health Care Billing Corporate Financial Misconduct and Securities Fraud Dodd Frank Wall Street Reform and Consumer Protection Act Fraud Substantial IRS and Tax Fraud Pharmaceutical and Medical Device Kickbacks and Off-Label Marketing Cases Federal Mineral Lease Payment Fraud (oil, natural gas on federal lands)
05/18/2018 It’s Time for a Corporate Crime Database and Annual Report
Consumer advocate Ralph Nader has spearheaded a group of organizations pushing for Attorney General Jeff Sessions to create an annual corporate crime report and database similar to the Uniform Crime Reporting Program that has documented the rise and fall of street crime over the course of the last 80 years. Taxpayers Against Fraud sent its own letter to Attorney … Continue reading It’s Time for a Corporate Crime Database and Annual Report…READ MORESource: TAF Education Fund Blog