The False Claims Act is the most important Federal law under which U.S. taxpayers can recover the billions of dollars that U.S. government contractors steal every year through fraud.

The FCA provides a legal tool to counteract fraudulent billings turned in to the Federal Government. FCA claims have been filed by persons with knowledge of frauds that have typically involved the health care, military, or other government spending programs.  The FCA establishes liability when any person or entity improperly receives from or avoids payment to the Federal government. Basically, the FCA prohibits the following:

1. Knowingly presenting, or causing to be presented to the Government a false claim for payment;

2. Knowingly making, using, or causing to be made or used, a false record or statement to get a false claim paid or approved by the government;

3. Conspiring to defraud the Government by getting a false claim allowed or paid;

4. Falsely certifying the type or amount of property to be used by the Government;

5. Certifying receipt of property on a document without completely knowing that the information is true;

6. Knowingly buying Government property from an unauthorized officer of the Government, and;

7. Knowingly making, using, or causing to be made or used a false record to avoid, or decrease an obligation to pay or transmit property to the Government.

Under the False Claims Act (FCA), anyone who knowingly submits, or causes another person or entity to submit, false claims for payment of government funds is liable for three times the government’s damages plus civil penalties of $5,500 to $11,000 for each false claim.

Whistleblower or Qui Tam Provisions Under the FCA

The False Claims Act contains strong whistleblower or qui tam, provisions. Qui tam is a legal provision which allows a private individual, or whistleblower with knowledge of past or present fraud committed against the U.S. federal government to bring suit on its behalf. Its name is an abbreviation of the Latin phrase “qui tam pro domino rege quam pro se ipso in hoc parte sequitur,” meaning “he who sues for the king as well as for himself." This provision allows citizens with evidence of fraud against government contracts and programs to sue, on behalf of the government, in order to recover the stolen funds. A private person, known as a “relator,” can 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.

The citizen whistleblower or "relator," may be awarded a portion of the funds recovered, typically between 15 and 25 percent as compensation for the risk and effort of bringing a qui tam lawsuit.  A qui tam suit is initially filed under seal and remains under seal for at least 60 days so that the Department of Justice can investigate and decide whether to join the action. 

Why Qui Tam - Incentive for Private Citizens

The American Civil War (1861–1865) was marked by fraud on all levels.  The Congress on March 2, 1863, passed the False Claims Act, in an effort by the USA to respond to entrenched fraud where the official Justice Department was reticent to prosecute fraud cases. Congress included the "qui tam" provision as a reward (as a percentage of the recovery) for private citizens to  sue on behalf of the government

Again in response to widespread reports that the U.S. Treasury was being repeatedly bilked by government contractors, in 1986 Congress re-energized the False Claims Act. The 1986 amendments strengthened the False Claims Act’s qui tam provisions, creating incentives for private citizens with evidence of fraud to commit their time and resources to supplement the Government’s efforts. By doing so, Congress created a powerful public-private partnership for uncovering fraud and obtaining the maximum recovery for taxpayers.

Common Fraud Cases Brought Under the FCA

The False Claims Act covers fraud involving any federally funded contracts or programs, except tax fraud.  In the early 1990s most of the FCA cases  involved Defense contracts, but recently more and more cases have involved Medicare fraud, and fraud against other federally funded health care programs.   There is a broad range of ways in which frauds are committed by companies again the taxpayers. Here are some of the examples:   

	Billing for goods and/or services that were not delivered or rendered.
	Billing for goods and or services that were not specified by the government.
	Billing for activities not in the contract such as billing for marketing or lobbying, etc.
	Submitting false lab reports, service records, field logs, or samples in order to show better-than-actual performance.
	Providing substandard, broken or untested equipment as operational and tested.
	Billing for premium equipment but actually providing inferior equipment.
	Performing inappropriate or unnecessary medical procedures in order to increase Medicare reimbursement.
	Billing for work or tests not performed.
	Running a lab test whenever the results of some other test fail or fall within unacceptable range, even though the second test was not specifically requested.
	Certifying that something has passed a test, when in fact it did not.
	"Lick and stick" prescription rebate fraud and "marketing the spread" prescription fraud, both of which involve lying to the government about the true wholesale price of prescription drugs.
	Using multiple billing codes instead of one billing code for a drug panel test in order to increase payments.
	Billing more for a panel of tests when a single test was requested and required.
	Charging more than once for the same goods or service.
	Inflating bills by using diagnosis billing codes that wrongly suggests a more expensive illness or treatment.
	Billing for brand-named drugs when generic drugs are actually provided.
	Charging for employees who were not actually on the job, or billing for made-up hours in order to maximize reimbursement.
	Billing at doctor rates for work that was actually done by a nurse or resident intern.
	Prescribing a medicine or recommending a type of treatment or diagnosis regimen in order to win kickbacks from hospitals, labs or pharmaceutical companies.
	Billing for unlicensed or unapproved drugs.
	Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid.
	Falsifying natural resource production records -- Pumping, mining or harvesting more natural resources from public lands that that reported to the government.
	Misrepresenting the value of imported goods or their country of origin for tariff purposes.
	False certification that a contract falls within certain guidelines (e.g., the contractor is a minority or veteran when it is not).
	Billing for research that was never conducted; falsifying research data that was paid for by the U.S. government.
	Paying bribes or kickbacks to win a government contract.
	False certification that the conditions of contract were fulfilled when they were not, to receive payments or award fees. For example, certifying to the government that the contractor complied with environmental, safety, or labor laws when it did not.

State False Claims Acts

In addition to the Federal False Claims Act, a few states have enacted False Claims Acts that operate similar to the Federal FCA to deter frauds against state governments. States with False Claims Acts include: California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Louisiana, Massachusetts, Nevada, New Mexico, Tennessee, Texas, and  Virginia.
 

What You Can Do if You Feel You have Knowledge of Fraud
 

If you have knowledge of fraud against the U.S. government, you may have a claim under the qui tam provision of the False Claims Act.  It is important that for you to be a relator in a False Claims Act action, the knowledge of fraud should not public knowledge, and thus it may be important for you to contact an attorney in confidence who can help you protect your legal rights. Please keep in mind that there may be time limits within which you must commence suit.

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