A Guide to the False Claims Act: Brief Overview

The False Claims Act (FCA), 31 U.S.C. §§ 3729-3733,  traces its origins all the way back to the Civil War.  Although the FCA has undergone revisions over the years since the Civil War, the 1986 amendments to the FCA have provided the basis for the number of successful FCA actions that we see today.

The FCA provides an incentive for whistleblowers (called “relators”) to come forward with evidence that a person or company is committing fraud against the federal government.  For violations of the FCA, the government is entitled to recover three times the amount of its damages plus a statutory penalty for each false claim.  If the government recovers funds as a result of the relator’s suit, the relator will potentially receive 15% to 30% of the government’s recovery.  Many states have now enacted false claims statutes modeled after the federal statute.

The process to file an FCA action begins with a pre-filing disclosure statement submitted to the government laying out the basis for the lawsuit.  The complaint is then filed, under seal, along with another disclosure statement.  The defendant is not served with the complaint and will not know of the suit.  The government will investigate the allegations in the suit for at least 60 days, but usually for at least 6 months, and often for two or three years.  After the investigation, the government will decide whether or not to intervene in the suit.  If the government intervenes, it will effectively take over the suit.  If the government does not intervene, the relator can pursue the action privately.

There are various defenses to FCA cases, and there is also a six-year statute of limitations.  Additionally, the FCA has an anti-retaliation provision.

 

If you believe you have a False Claims Act case, contact the Rabon Law Firm for a free consultation.

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