A False Claims Act violation occurs when a person or entity deceives the Federal Government to improperly obtain money from the Government or improperly be relieved from paying money to the Government. 31 U.S.C. Section 3729(a) lists the specific misconduct the Act covers. The FCA prohibits, among other things:
- knowingly presented or caused to be presented a false or fraudulent claim for payment or approval to an officer or employee of the United States government;
- knowingly made, used, or caused to be made or used, a false record or statement to get a false or fraudulent claim paid by the government;
- conspired to defraud the government by getting a false or fraudulent claim allowed or paid; or
- knowingly made, used, or caused to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, (reverse false claim).
A “claim” is “any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient” if any portion of it will be provided or reimbursed by the United States. Thus, requests for money or property made directly against the government or made to a party other than the government, will be actionable under the FCA if payment of the claim would ultimately result in a loss to the United States.
Certain claims are not actionable, including:
- certain actions against armed forces members, members of Congress, members of the judiciary, or senior executive branch officials;
- claims, records, or statements made under the Internal Revenue Code of 1986 (tax fraud);
- suits based on allegations or transactions that are already the subject of a civil suit or administrative money penalty proceeding to which the government is already a party;
- suits based on prior qui tam suits;
- cases based on allegations or transactions that have been publicly disclosed, unless the relator has direct and independent knowledge of those allegations or transactions and has provided the information to the government prior to filing suit.
- mismanagement by government contractors that does not rise to the level of false statements knowingly made to the government for purposes of getting a claim paid, or
- allegations that the government’s own ineptitude or waste constitute a false claim, since only those who have made false claims to the government are proper defendants under the statute. Claims against states and state entities are also not actionable because states are not “persons” within the meaning of section 3729(a) of the act.
Persons who violate the False Claims Act are required to pay back the Federal Government three times the actual damages suffered, in addition to mandatory civil penalties of $5,500 to $11,000 for each false claim. The relator may recover as much as 30 percent of this total. A successful qui tam suit not only stops the dishonest conduct, but also deters similar conduct by others.