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David A. Burkhalter, II
Burkhalter, Rayson & Associates,
P.C.
General
Information About The False Claims Act:
President Lincoln signed off on this law in 1863
in an attempt to combat the massive fraud that was occurring during
the Civil War where contractors were ripping off the Government, for
example, by selling defective ammunition for use by the soldiers.
The law was substantially strengthened in 1986, and in recent years,
has resulted in the U.S. Government recovering numerous
multi-million dollar settlements from corporations or individuals
who have violated the Act.
Using the False Claims Act, 31 U.S.C. § 3729,
private citizens (called "Relators") can help the Government fight
fraud. The Act allows ordinary citizens who have knowledge of
fraudulent acts to bring suit on behalf of the Government against
those who have filed false claims with the Government. If money is
recovered for the Government in the action, then the person bringing
the case is entitled to a percentage of the amount recovered -
anywhere between 15% to 30% of the amount recovered. Since 1986,
private citizens have received over a billion dollars as a result of
false claim cases they have filed.
A False Claims Act violation occurs whenever a
person or entity deceives the Government in order to improperly
obtain money from the U.S. Government or in order to improperly be
relieved from paying money to the U.S. Government. Cheating the
Government, unfortunately, has been a long standing practice. As
Benjamin Franklin (1706-1790) observed: "There is no kind of
dishonesty into which otherwise good people more easily and
frequently fall than that of defrauding the government."
The definition of a false claim is extremely broad
and it encompasses all different kinds of activity. The False Claims
Act makes it illegal for a company to present a false claim for
reimbursement to the United States where there is "deliberate
ignorance" or "reckless disregard" of the claim’s falsity. The law
prohibits "submitting or causing to submit" a false claim. It also
prohibits conspiring with another to get a false claim paid. It has
been interpreted as covering claims submitted when there is a false
certification of compliance with Federal and State laws and
regulations when that is a condition of payment.
The law creates liability for a separate $5,500 to
11,000 civil fine for each record falsified and provides for
treble damages. The amount of potential recovery for the Government
is massive, and therefore, the potential rewards for whistleblowers
can be huge, depending on the activity disclosed. For example,
according to the U.S. Department of Justice, since 1986 the Federal
Government has collected more than $6 billion dollars as a result of
private whistleblower lawsuits brought under the False Claims Act.
What Kinds Of Cases Are Being
Brought? Most cases brought under the False
Claims Act involve the healthcare industry or the defense industry.
The Government spends billions of dollars annually on military and
healthcare related expenditures. The estimated amount of fraud is
massive. For example, a U.S. Senate report estimates that there is
$100 billion in fraud each year.
The law is harsh to companies that deceive the
Government in order to improperly obtain money (or be relieved of
paying money), and ignorance is no excuse. They can be held liable
where false claims are being made with "deliberate ignorance ‘or’
reckless disregard". The type of activity covered by the Act is very
broad. All forms of deceit against the Government to improperly
obtain money (or to improperly be relieved from paying money) are
open to False Claims Act (Qui Tam) cases. Contractors who cheat the
Government beware!
What Is The Time Period To Bring A Claim?
The statute of limitations for suits under the False Claims Act is
the later of:
within six years from the date of the illegal conduct, or
within three years after the Government knows or should have
known about the illegal conduct, but in no event later than ten
years after the illegal activity.
How Does The Process Work And What Reward Is
Available? A person who begins a False
Claims Act (or Qui Tam) case is entitled to a proportional share of
the funds that are recovered for the Government. The Qui Tam case is
filed "under seal" and it is served on the Government. Once the suit
is filed, the Government will decide if it will join in the case. If
the Government joins the case, the individual who brings the claim
is usually entitled to receive 15% to 25% of the recovered funds. If
the Government decides not to join the case, the individual is
entitled to 25% to 30% of the recovered funds.
People Who Bring False Claims Act/Qui Tam Cases Are
Protected By Law: Citizens who bring suit
against his or her employer under the False Claims Act are protected
by law from retaliation. The protections are in effect even before a
Qui Tam case is filed. The individual is protected against
discharge, demotion, suspension, threats, harassment, and
discrimination.
Confidentiality Is Essential. Do not discuss your potential case with anyone other
than your attorney. The opportunity to bring a case and
receive a reward could be lost if there is a public disclosure of
the deceitful activity or if someone else files a False Claims suit
before you do making similar allegations.
Copyright© 2005 Burkhalter, Rayson &
Associates, P.C. All Rights Reserved
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The materials in our web page are for the general education and
knowledge and do not constitute legal advice or create an
attorney-client relationship. Litigation can be complex and the law
ever-changing, and it varies from jurisdiction to jurisdiction. If
you have an individual legal problem or question, you should seek a
legal opinion that takes into account the applicable law and your
particular circumstances. | 
