The False Claims Act: An Overview

Introduction

The False Claims Act (FCA) is a federal law that imposes liability on individuals and companies who defraud governmental programs. It is the government's primary tool for combating fraud against the federal government.

History of the False Claims Act

The FCA was enacted during the Civil War in 1863 in response to defense contractor fraud. It has been amended several times, most notably in 1986, to strengthen its provisions and encourage whistleblowers to come forward.

How the False Claims Act Works

Qui Tam Provisions

The FCA includes qui tam provisions that allow private individuals, known as "relators" or whistleblowers, to file lawsuits on behalf of the government. If the lawsuit is successful, the whistleblower may receive a portion of the recovered damages.

Penalties and Damages

Violators of the FCA may be liable for treble damages (three times the government's losses) and significant civil penalties for each false claim submitted.

Types of False Claims Act Violations

What are the three major categories of false claim act cases?

False Claims Act violations generally fall into several categories, including: (1) presenting false or fraudulent claims for payment, (2) making or using false records or statements material to a false claim, and (3) conspiring to commit such acts. Additionally, the FCA covers "reverse false claims," where a person avoids paying money owed to the government.

Reverse False Claims

The FCA also addresses "reverse false claims," which involve knowingly making a false record or statement to avoid, decrease, or conceal an obligation to pay money to the government.

Elements of a False Claims Act Case

What are the elements of the False Claim Act?

To establish liability under the FCA, the government (or whistleblower) must generally prove that: (1) the defendant submitted or caused the submission of a claim to the government, (2) the claim was false or fraudulent, (3) the defendant knew the claim was false or acted with reckless disregard or deliberate ignorance of the truth, and (4) the false claim was material to the government's decision to pay or approve the claim.

What are the elements of the reverse false claims law?

For reverse false claims, the elements include: (1) knowingly making, using, or causing to be made or used, a false record or statement, (2) material to an obligation to pay or transmit money or property to the government, and (3) intending to conceal, avoid, or decrease the obligation.

Legal Standards and Burden of Proof

What is the burden of proof for the False Claims Act?

The burden of proof in FCA cases is "preponderance of the evidence," meaning that it is more likely than not that the defendant is liable. This is a lower standard than "beyond a reasonable doubt," which is used in criminal cases.

Conclusion

The False Claims Act remains a powerful tool for the government to combat fraud and recover taxpayer dollars. Its qui tam provisions continue to incentivize whistleblowers to report fraud, making it a cornerstone of federal anti-fraud enforcement.