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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 Originally called the “Lincoln Law,” it was originally enacted in 1863, as a result of shady dealings the government had with suppliers during the Civil War.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.