The False Claims Act
The False Claims Act has proven to be one of the most effective mechanisms to recover funds that have been stolen from the government through fraud by corporations, such as pharmaceutical companies, defense contractors, and hospitals, as well as individual wrongdoers. The government has recovered more than $20 billion as a result of qui tam or whistleblower lawsuits, which have exposed fraud perpetrated against the government since the False Claims Act was amended in 1986. Among the most important provisions of the False Claims Act are its qui tam or whistleblower provisions, which enable a person, known as a relator, who knows of a fraud to initiate a lawsuit on behalf of the government and, if the lawsuit is successful, to share in the proceeds recovered by the government. The qui tam provisions of the False Claims Act impose liability on any person who:
- knowingly presents, or causes to be presented, a false or fraudulent claim for approval;
- knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;
- conspires to violate any of the other substantive liability provisions of the False Claims Act;
- has possession, custody, or control of property or money used, or to be used, by the government and knowingly delivers, or causes to be delivered, less than all of that money or property;
- is authorized to make or deliver a document certifying receipt of property used, or to be used, by the government and, intending to defraud the government, makes or delivers the receipt without knowing that the information on the receipt is true;
- knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the government, or a member of the armed forces, who lawfully may not sell or pledge property; or
- knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money to the government.
If there is any retaliatory action taken against those who seek to stop violations of the False Claims Act, additional liability may follow for the wrongdoers.