How Does the False Claims Act Help Combat Government Fraud?

The False Claims Act (FCA) is a legal measure designed to protect the integrity of government expenditures. Enacted during the American Civil War in 1863, its primary purpose was to curb defense contractor fraud, an objective that has since broadened to encompass a range of fraudulent activities against the federal government. At Miller Shah LLP, our attorneys possess a deep understanding of the FCA, particularly in qui tam cases, where we support whistleblowers in bringing fraudulent activities to light. We are here to explore how the FCA helps to mitigate the risks of government fraud.

What Is the False Claims Act?

The FCA is a tool in the fight against government fraud, imposing liability on individuals or entities that knowingly submit false claims to the government. This results in the offenders being liable for three times the government’s damages plus significant penalties. The act empowers private citizens to file qui tam lawsuits on behalf of the government and potentially share in the financial recovery. This provision has made the FCA a powerful mechanism for exposing and penalizing fraudulent activities, with the Department of Justice obtaining over $2.68 billion in settlements and judgments in the fiscal year ending September 30, 2023. Since its significant amendments in 1986, the FCA has facilitated over $75 billion in recoveries, showcasing its effectiveness as a deterrent against fraud.

Empowering Whistleblowers to Combat Fraud

One of the most distinctive features of the FCA is its empowerment of whistleblowers through the qui tam provision. This allows individuals with knowledge of fraud against the government to file lawsuits on its behalf, even if they are not directly harmed by the fraudulent actions. The FCA’s strong whistleblower incentives, including a portion of the financial recovery, encourage individuals to come forward with information that can lead to successful litigation against fraudulent entities.

Key Factors Making the FCA Effective

Several factors contribute to the effectiveness of the FCA in combating government fraud:

• Mandatory Treble Damages: Offenders are liable for three times the government’s losses, significantly increasing the financial risk for committing fraud.
• Mandatory Civil Penalties: With penalties of up to $11,000 per false claim, the financial consequences for fraudulent entities can be substantial.
• Strong Whistleblower Incentives: Whistleblowers may receive a portion of the government’s recovery, motivating individuals to report fraudulent activity.
• Permissive Knowledge Requirement: The FCA covers fraudulent actions committed with actual knowledge, deliberate ignorance, or reckless disregard of the truth, broadening the scope of actionable offenses.
• Exposure of Contractors to Liability: The FCA applies to any individual or entity that submits false claims, ensuring that contractors and others who defraud the government are held accountable.

These components of the FCA create a formidable framework for detecting, prosecuting and deterring fraud against the U.S. government.

Understand Your Protections With an Attorney

The False Claims Act is a critical tool in safeguarding the integrity of government spending and operations. The FCA discourages deceitful practices and promotes accountability by enabling whistleblowers to file qui tam lawsuits and imposing severe penalties on those found guilty of fraud. At Miller Shah LLP, our team of accomplished attorneys is dedicated to supporting whistleblowers and ensuring that entities committing fraud against the government are brought to justice. If you have information about fraudulent activities or are considering a qui tam lawsuit, we invite you to contact our attorneys. Together, we can work to protect public resources and uphold the law.