Also called the ‘Lincoln Law,’ the False Claims Act, in summary, holds companies and individuals liable for fraud against the government. The qui tam clause under this act is what encourages whistleblowers to come forward and file legal actions on behalf of the government. The industries most targeted by FCA claims are the healthcare, military, and other spending programs, and these claims dominate the list of the largest pharmaceutical settlements.
A Brief History of the False Claims Act
A variant of the False Claim Act has existed throughout history. The earliest recorded version of the FCA is in 1318 when King Edward II offered a third of the penalty to a relator who sued false wine merchants. Henry VIII enacted the Maintenance and Embracery Act of 1540, which pertains to legal proceedings over the title to lands. While the Act no longer is in place in England as of 1967, it is still in force in the Republic of Ireland.
While the United States was introduced to an early version of the FCA during its colonial days, it was only during the Civil War that the United States’ version of the law was codified. There was rampant fraud on both the Union and Confederate sides during the war; stories circulated of decrepit horses and mules, faulty rifles and ammunition, and rancid provisions being provided to both governments by individuals under contracts. As a result, Congress passed the FCA on March 2, 1863. The Act was relaxed somewhat during World War II due to reliance on criminal law to bring charges against unscrupulous contractors, but was strengthened in 1986 and again in 2009.
How Does the False Claim Act Help Whistleblowers?
Under the qui tam provision of the FCA, a whistleblower (or ‘relator’) can bring a claim against a company or individual who is defrauding the government. To reward the relator for bringing the case, the government rewards them with up to 25 percent of the funds recovered in the suit. Qui tam cases can be filed in the following cases:
- Knowingly presenting a false claim for payment,
- Knowingly making or using a false claim or statement.
- Conspiracy to violate the False Claims Act.
- Falsely certifying property to be provided to the government.
- Knowingly buying government property from an unauthorized agent.
Filing a Claim Under the False Claim Act
To file a qui tam complaint under the FCA, the relator must file the complaint under federal seal, serve the complaint on the government (but not necessarily the defendant), and the complaint must be buttressed by a comprehensive memorandum detailing the facts of the complaint. To prevent retaliation against a whistleblower, the FCA provides up to double the damages to a whistleblower who is retaliated against by their employer for reporting fraud to the government.
Call (770) 643-1606 to find out more about the False Claims Act summary by contacting Bothwell Law Group online.