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How Knowing the False Claims Act History Can Help Your Case

False Claims Act History

False Claims Act HistoryThe False Claims Act History is a long one. Qui tam laws date back to the Middle Ages in England. Nearly 700 years ago, King Edward II came up with a one third reward to individuals (relators) if the relator successfully sued government officials who were moonlighting as wine merchants.

Two hundred years later, Henry VII followed suit. The Maintenance and Embracery Act 1540 allowed individuals (common informers) to sue for certain interference with justice in land title related legal proceedings. Ireland still has this act in force today.

So, how does this relate to America?

During the American Civil War (1861 – 1865), all kinds of fraud was going on such as:

  • Contractors selling decrepit mules and horses in ill health to the Union Army
  • Some contractors selling rancid provisions and rations to the Union Army
  • Contractors selling faulty rifles and ammunition to the Union Army

Because of this and other acts, Congress passed the False Claims Act on March 2, 1863.  At times, the False Claims Act is called the “Lincoln Law”.  This is because President Abraham Lincoln was in office at the time.

Under the False Claims Act, the qui tam provision offered a reward permitting citizens to sue on behalf of the government. As such, said “whistleblowers” can receive a percentage of the recovery.  U.S. Senator Jacob M. Howard sponsored this legislation.  He knew some of the whistle blowers were a part of the unethical activities themselves. However, he said “I have based the [qui tam provision] upon the old-fashioned idea of holding out a temptation, and ‘setting a rogue to catch a rogue,’ which is the safest and most expeditious way I have ever discovered of bringing rogues to justice.”

Over the Years

The False Claims Act has primarily been used against defense contractors. However, health care fraud began to receive more focus in the 1990s. By 2008, health care fraud accounted for 40% of recoveries.

In 2009, the Fraud Enforcement and Recovery Act of 2009 (FERA) passed into law. Among other things, this Act increased the protection of qui tam relators.

There were multiple major changes to the FCA because of this Act.

President Barak Obama’s signature put the Patient Protection and Affordable Care Act into place in 2010.

By 2014, thirty states and the Disctrict of Columbia now have False Claims statutes. These are in place to protect publicly funded programs from fraud.

Knowing the False Claims Act History can help your case. For hundreds of years, individuals have been able to file claims on behalf of the government. The laws are for people like you who know of others committing fraud against the government or against individual states.

If you do know of fraud, contact a whistleblower attorney as soon as possible.

A False Claims Act Summary: The Short Version of What You Need to Know

False Claims Act Summary

False Claims Act SummaryAlso 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.

What Is the False Claims Act and When Did It Take Effect?

What Is the False Claims Act

What Is the False Claims ActIf you’ve been wondering, “ What is the False Claims Act, and why do I care? ” then this post is for you! Originally called the “Lincoln Law,” it was originally enacted in 1863, as a result of shady dealings the government had with suppliers during the Civil War.

At its most basic level, it codifies a process for investigating fraud in all kinds of government claims and contracts, giving Uncle Sam the teeth needed to get money back when it’s due. It establishes clear liability for any person or entity who receives funds from, or avoids payments to, the federal government on a fraudulent basis. And it affords individuals incentives, and protection, in exchange for a detailed reporting of fraud against the government. (The one notable exception to this is tax fraud; it’s governed by a different set of laws and statutes).

Qui Tam Provision

One of the most important features, the qui tam provision, permits private citizens to sue individuals and businesses on behalf of the U.S. Government. If the suit brings damages or compensation, the petitioner is paid a percentage of the recovered funds. This was due in large part to Senator Jacob M. Howard, who believed anyone who had knowledge of unethical activities were likely engaged in them already. His qui tam compensation plan was aimed at “setting a rogue to catch a rogue.”

It also outlines strict provisions for protecting the whistleblower. Lawsuits are filed in secret, without the suspect party being notified. The filer also is shielded from retaliation by the defendant. They cannot be harassed, lose their job, or otherwise be discriminated against as a result of filing suit. Any form of retaliation against the plaintiff will result in an award of damages for hardship and suffering, as well as any owed back pay, including interest.

False Claims Act: Billions in Recovered Dollars

Throughout the decades, the FCA has been revised on a number of occasions. While originally designed and used against defense contractors, the rise of healthcare fraud in mid-90’s led to a shift in focus. However, in 2015, the Justice Department recovered over $3.5 billion in false claims, with $1.1 billion of that number still coming from false claims made by federal defense contractors.

A majority of the recoveries were made under qui tam lawsuits, which entitled the filers to anywhere from 15% to 30% of the recovered monies. Whistleblower awards totaled $597 million this year; a little over 17% of total money recovered.

Think You Have a Case Covered by the False Claims Act and Qui Tam?

The first thing you need is an experienced lawyer, and Bothwell Law group can help. Find out what you need to know by calling 770.643.1606, and we’ll explain what the False Claim Act is, and help determine if it applies to you.