The False Claim Act

The Federal False Claims Act (FCA), created during the Civil War, is legislation that strictly prohibits defrauding the American government and U.S. taxpayers for financial gain. The Qui Tam provision of the act allows for people who are aware of fraud being committed against the government to file a claim on the government’s behalf. This person is called a “Relator.” Once filed, the case is presented to the government for review. The government will either take up the case (intervene) using their resources to litigate or it will decline to intervene. If declined, the FCA allows the Relator to pursue and litigate the case on their own with their own attorneys.

If a defendant is found in violation of the Federal False Claims Act, they are statutorily required to pay up to three times the monetary damages suffered by the government/taxpayers, a civil penalty of $5,500-$11,000 per “false” claim, and the Relator’s attorney fees. As an incentive for those courageous people to report fraud against the government, the Relator is rewarded 15-30% of money returned to the government.

The False Claims Act (FCA) also provides protection for the Relator in the form of an anti-retaliation provision (31 U.S.C. §3730(h)). According to the provision, an employer cannot retaliate against an employee for bringing attention (whistleblowing) to the employers’ fraudulent behavior, either within the company or outside of it. To have a retaliation claim under the FCA, the employer must be aware of an employee’s “whistleblower” actions and there must be proof that retaliation was a direct result of those actions.

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