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What Is the False Claims Act: Who Does It Protect?

Posted on March 20, 2019 | Firm News

Due to recent occurrences within the federal government, most Americans have heard of whistleblower protections. However, the False Claims Act and its protections are much less well-known, even though the two go hand in hand. What is the False Claims Act? Who does it protect?

What Is the False Claims Act?

People often refer to the False Claims Act as the Lincoln Law, because President Abraham Lincoln’s administration passed the law. A response to rampant fraud on both sides of the American Civil War, the Union government passed the False Claims Act. Legislators designed the False Claims Act to allow those with evidence of fraud and wrongdoing against the federal government to report or put a stop to fraudulent activities.

Under the False Claims Act, the following actions will result in violations.

  • Knowingly presenting a false or fraudulent claim for payment to the US government
  • Knowingly using a false statement or record to request a claim’s payment
  • Conspiring with other individuals in order to get a false claim paid
  • Knowingly using a false statement or record to avoid an obligation to pay the federal government

The False Claims Act exists to protect the federal government from fraudulent practices and payment of fraudulent claims.

What Is a Qui Tam Provision?

The False Claims Act went so far as to provide a Qui tam provision, permitting civilians with knowledge of fraud to sue fraudulent parties on the behalf of the government and receive part of the money claimed. In such Qui tam provisions, the government has the option to join in the lawsuit, or decline and allow the citizen to proceed with a private lawsuit on their own. During Lincoln’s time, lawmakers consider such a reward for whistleblowing an obvious way to catch fraudulent parties.

Anyone with information regarding a false claim against the government may file a lawsuit under the Qui tam provision. However, if you have evidence of a fraudulent claim and find out someone else or the US Government has already filed a qui tam lawsuit with the same evidence, you cannot file a suit. Therefore, your suit may not lead to a settlement if one is already present.

How Can You File a Qui Tam Suit?

You must file a Qui tam suit confidentially and under seal in federal district court. You will receive all the protections of filing the suit confidentially, although someone must serve a copy of the evidence and the contents of the suit to the Attorney General and US Attorney for that district on camera and under seal. The court will not release the information to the defendant or the public, in order to protect you. However, if you violate the seal, the court could dismiss your suit.

You must file a Qui tam suit no more than six years after the violation, or three years after the government should have known about the violation, whichever is later. However, the overall statute of limitations cannot exceed ten years.

What About Whistleblower Protections?

The False Claims Act includes federal whistleblower protections under Section 3730(h). Defendants or offices may not fire, demote, harass or retaliate against whistleblowers. Employees experiencing demotion, firing, harassment or other forms of retaliation for filing a Qui tam suit may receive relief including:

  • Reinstatement to your original job
  • Double back pay for the time missed
  • Compensation for attorney’s fees and other costs of filing suit

In this way, the False Claims Act protects whistleblowers as well as the federal government. While the government receives protection from fraud, whistleblowers receive protection from reprisal and retaliation. However, it is important to note that many states have their own protections for whistleblowers under state law, so it is not certain how far the scope of the False Claims Act protections extend.

In summary, if you have knowledge of fraud, waste or abuse of government funds, including false claims, you may choose to file a Qui tam suit on behalf of the government. You will receive a portion of the award for the suit, as well as protection against reprisal. However, there are several procedures to follow when filing suit, and hiring an experienced whistleblower protection attorney is an essential first step.