Microsoft Word False Claims Act Description rm 3 8 07.doc


1 The False Claims Act ("FCA") provides, in pertinent part, that: (a) Any person who (1) knowingly presen ts, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or the Government; fraudulent claim paid or approved by (3) conspires to defraud the Government by getting a false or fraudulent claim paid or approved by the Government;. . . or (7) knowingly makes, uses, or causes 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, *** is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person . . . . (b) For purposes of this section, the terms "knowing" and respect to information (1) has "knowingly" mean that a person, with actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the info rmation; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required. 31 U.S.C. § 3729. While the False Claims Act im poses liability only when the claimant acts “knowingly,” it does not require that the person su bmitting the claim have actual knowledge that the claim is false. A person who acts in reckless disreg ard or in deliberate ignorance of the truth or falsity of the information, also can be found liable under the Act. 31 U.S.C. 3729(b). In sum, the False Claims Act imposes liability on any person who submits a claim to the federal is false. An example may be a physician who government that he or she knows (or should know) submits a bill to Medicare for medical services she knows she has not provided. The False Claims may knowingly submit a false record in order to Act also imposes liability on an individual who this may include a government contractor who obtain payment from the government. An example of submits records that he knows (o r should know) is false and that indicate compliance with certain contractual or regulatory requirement s. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim” may include a hospital who obtains interim payments from Medicare throughout the year, and then knowingly files a fals e cost report at the end of the year in order to avoid making a refund to the Medicare program. In addition to its substantive provisions, the FCA provides that private part ies may bring an action on behalf of the United States. 31 U.S.C. 3730 (b). These private parties, known as “ qui tam relators,” may share in a percentage of the proceeds from an FCA action or settlement.

2 Section 3730(d)(1) of the FCA provi des, with some exceptions, that a qui tam relator, when the receive at least 15 percent but not more than 25 Government has intervened in the lawsuit, shall percent of the proceeds of the FCA action depending upon the extent to which the relator prosecution of the action. When th e Government does not intervene, substantially contributed to the e relator shall receiv e an amount that the court decides is section 3730(d)(2) provides that th reasonable and shall be not less than 25 pe rcent and not more than 30 percent. The FCA provides protection to qui tam relators who are discha rged, demoted, suspended, threatened, harassed, or in any ot in the terms and conditions of her manner discriminated against their employment as a result of their furtheranc e of an action under the FCA. 31 U.S.C. 3730(h). Remedies include reinstatement with comparable seniority as the qui tam relator would have had but for the discrimination, two times the amount of any back pay, interest on any back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.

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