Understanding the False Claims Act

Under the False Claims Act (FCA), any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s loses plus penalties. FCA liability can arise in other situations, such as when someone knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government.  Conspiring to commit any of these acts also is a violation of the FCA. 

In addition to allowing the United States to pursue perpetrators of fraud on its own, the FCA allows private citizens, whistleblowers, to file suits on behalf of the government (called “qui tam” suits) against those who have defrauded the government.  Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery.  The goal is to recover taxpayer money lost due to alleged fraudulent activities, primarily in government programs like Medicare and Medicaid. 

Be mindful that the federal government often conduct both civil FCA actions and criminal investigations. If you are the target of a civil FCA action it is crucial that your attorney keeps it from becoming a criminal investigation. The first clue as to whether you are the target of a civil FCA action is receiving service of a Civil Investigative Demand (CID). I discuss the CID in another section.