The Federal False Claims Act might seem difficult to figure out, but it’s really not. Let’s break it down and explain the Federal False Claims Act to give you the clear understanding you need.
Let Us Explain the Federal False Claims Act in Simple Terms
The False Claims Act is also known as the Lincoln Law. The law exists as a way to stop people from defrauding the government. The False Claims Act allows for Qui Tam cases, which means citizens can file a lawsuit on behalf of the government. Anyone can file a case, whether they work for the government or not. These people are the whistleblowers.
The Federal False Claims Act began in 1863 during the American Civil War. Both sides in the war were defrauding the government on a regular basis. During the war, the government purchased supplies, including guns, horses, and ammunition. Some of the horses were not fit to work. Often the guns and ammunition didn’t work or were faulty.
President Abraham Lincoln and Congress created a law criminalizing this fraud. The False Claims Act provides a way for individuals to report fraud and even receive a reward for doing so.
What Does the Federal False Claims Act Cover?
The Federal False Claims Act makes cheating the government a crime. It allows for contractors and companies to face charges for fraud. Here are some of the things listed as violations of the FCA that can result in a lawsuit:
● Asking the government for payment of hours you have not worked
● Asking the government to pay for materials you have not used to complete government contracts
● Conspiring or planning to defraud the government
● Stating that you know something about completed or uncompleted work that you don’t know for a fact
● Buying government property from someone who is not allowed to sell it
It is important to note that whistleblowers can get compensation for a successful prosecution. This settlement also includes money to help with any court costs or income they lose because they made a complaint. The payment amounts to a percentage of the money recovered by the government and can reach millions of dollars. However, if the facts prove they participated in the offense, they don’t receive compensation.
Has the Description of the Federal False Claims Act Changed Since 1863?
Changes to the law came in 1986, 2009 and 2010.
In 1986 the government added a provision that meant a contractor had to make sure they knew what the rules meant. A contractor accused under the Federal False Claims Act cannot claim ignorance. They are no longer able to say “but I didn’t know” as their defense.
Also in 1986, the government increased how much reward money whistleblowers receive. In addition, they raised the penalties for offenses against the Federal False Claims Act. Congress added a protection provision so a whistleblower cannot lose their job as a result of coming forward. They have the right to reinstatement without penalty.
In 2009, Congress tightened up the Federal False Claims Act. Lawmakers added legislation clarifying the offenses.
In 2010, Congress made more changes. Now, people would not be able to file a claim for a charge that had already come before the court. This addition prevented whistleblowers from making claims based on the publicity of previous claims. The whistleblower must also have “direct knowledge” of the offense. They cannot make a claim based on what they’ve heard from others.
Other 2010 changes dealt with the overpayment of Medicare and Medicaid. People who defraud these services now have to repay the money within a particular timeframe. The anti-kickback legislation also went into effect; people cannot receive bonuses for using a product or service.
Why Would You Need to Explain the Federal False Claims Act?
Some people may not know what the Federal False Claims Act covers. If they are new to contracting for the government, they may not know what they need to avoid under the law. If you are aware of an offense against the Act, it is your responsibility to report it. New businesses must understand their liability.
With services such as Medicare and Medicaid, people may think there is no harm in exaggerating their expenses or services. But remember, exaggerating is the same as being dishonest. In the long run, it is fraud. People are taking money they do not deserve. This means others who need it will not be able to get it.
If you know of offenses against the Federal False Claims Act, you have a responsibility to report them. Let Bothwell Law Group explain the Federal False Claims Act by calling them at 770.643.1606 .