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Whistleblower: False Claims Act

On Behalf of | Dec 16, 2023 | Whistle-Blowing

The U.S. Government uses the Federal False Claims Act (FCA) to combat fraud. This act is a resource that whistleblowers can leverage to sue employers or organizations that are defrauding the government and recover penalties and damages on the government’s behalf. Moreover, the statute protects whistleblowers against retaliation from their employers.

Congress hopes that by creating monetary incentives and offering protection against retaliation, whistleblowers are effectively encouraged to come forward and report fraud. The FCA is commonly known as Lincoln’s Law because it was enacted during the Civil War for the purpose of countering widespread fraud by the contractors that were supplying the military.

The qui tam provision

At the heart of the False Claims Act lies the qui tam provision. This unique legal concept empowers private citizens, known as relators, to file lawsuits on behalf of the government. In doing so, these whistleblowers not only expose fraud but also stand to gain a percentage of the recovered damages, acting as a powerful motivator for individuals with insider knowledge to come forward.

Strict liability and penalties

Under the FCA, strict liability applies, meaning that individuals or organizations can be liable for submitting false claims, whether intentionally or due to negligence. False Claims refer to the submission of misleading or fraudulent information to the government for financial gain. This can include falsifying invoices, misrepresenting costs or providing inaccurate financial statements.

These false claims can be classified as conspiracy when two or more parties collude to commit fraudulent acts against the government. Essentially, this extends liability beyond individual wrongdoers, helping ensure that all involved parties are held accountable. There are also reverse false claims, which occur when entities knowingly avoid paying money owed to the government. This can involve underreporting obligations or manipulating financial records to circumvent payment requirements.

The Federal False Claims Act, with its historical roots and contemporary relevance, serves as a safeguard against fraud and deception. Anyone who is thinking about becoming a whistleblower can proactively seek legal guidance to better understand their rights and options under this law.