The False Claims Act Is Important
Added: (Fri Apr 23 2010)
Pressbox (Press Release) -
This particular Act helps the government sue people who are trying to rip them off. It’s one way to stop fraud in its tracks.
The False Claims Act (1863) (FCA) wasn’t really used all that extensively until the government caught on to its potential to combat fraud in their contracting processes. “Basically, the FCA says that a business is liable when it makes a false claim (called fraud) and it either knows the claim is false or is deliberately indifferent or reckless to that fact,” stated Seth Wilburn, of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer.
The False Claims Act lets a private individual (whistleblower) with information of fraud against the federal government bring a lawsuit against the defendant on behalf of the government. Many people may recognize this as a qui tam lawsuit, and plaintiffs are rewarded quite well for bringing fraud suits on behalf of the government.
“Most often the reward is a percentage of the settlement, which may be quite substantial, given that the usual percentage figures run from 15% to 30%. This applies whether or not the case actually made it to court as well, as many of these cases don’t always go that far,” added Wilburn.
For those running a business, they need to be aware of the fact that anyone fired may decide to file a whistleblower lawsuit. “While this may sound frivolous, the law relating to the FCA has changed in recent years and the scope of the Act expanded. With the expansion of the scope of the FCA, came a much broader definition of fraud that means false claims dealing with government spending in any form. Recent statistics indicate the number of these types of lawsuits is rising,” explained Seth Wilburn, of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer.
The FCA also features something referred to as reverse liability. What this means is that when a contractor knowingly uses a false statement to avoid, decrease or conceal any obligation to the US government, they may have a whistleblower lawsuit filed against them.
A False Claims Act case may be reviewed at several levels by the government and the Department of Justice. In many of the cases, government auditors are sent out to do a forensic audit and once that is completed, the process continues. “Even if the government doesn’t want to get involved in the case, the qui tam plaintiff may still pursue it,” said Wilburn.
The False Claims Act is something a company needs to know about if they are running a business in the US. Failure to understand it may result in tremendous financial loss to an organization in concert with other civil and criminal sanctions.