Reporting Fraud And Why The False Claims Act Is So Important
Fraud is costing the US Government billions of dollars every year and it is an uphill struggle to try and keep tabs on all the areas where fraud is occurring. The False Claims Act is one of the most important weapons that the Government has to recover some of the billions that are being lost. This Act contains qui tam or whistleblower provisions, which makes reporting fraud both monetary and morally rewarding for those individuals who get involved.
So what exactly is the False Claims Act?
The False Claims Act is often referred to by other names such as the “Lincoln Act”, the “Qui Tam Statute” and the “Informers Act” and was introduced during the American Civil War. The law was intended to stamp down on dishonest supplies to the military since the war action alone made it impossible for the government to carry out investigations in order to bring about prosecutions. Today the mission is pretty similar due to the huge amount of programs that the federal government runs and which are funded by taxpayers’ money.
More than 4,000 Qui Tam cases have been filed since 1986, when the statute was amended to make it easier for private citizens to sue. As a result of reporting fraud, the government has recovered over $6 billion out of which around $960 million has been paid out to whistleblowers or relators as they are also known. The fraud needs to be substantial, in excess of $1 million and if successfully proven, the relator can receive a share of between 10-30%. Since many cases run into millions of dollars, a relator's share could be a life-changing amount of money.
Who does the Law pertain to?
In essence the Law covers any fraudulent behavior within federally funded programs or contracts. It does, however, exclude tax fraud. Whilst many of the earlier qui tam actions involved defense contracts, recent years have seen a huge increase in fraud within both the Medicare and Medicaid programs.
What types of fraud can be reported under the False claims Act?
There are many different types of fraud that can be prosecuted, and these are some of the most common:
- Charging for services or goods that were never delivered
- Winning contracts through bribery or kickbacks
- Falsifying time sheets and creating phantom employees
- Charging more than once for the same service or goods
- In the case of Medicare, charging for unnecessary procedures so as to be reimbursed
- Charging for high end equipment and sending out lower cost or used equipment
- Billing for branded drugs and supplying generic drugs
- Not informing the government if they have overpaid
- Charging for activities not contained in a contract such as marketing or lobbying
How do I report fraud?
If you have first hand knowledge or have found out from another employee, that your employer is doing dodgy deals, then in the first instance you should contact a qui tam lawyer who is well versed in handling these matters. Reporting fraud against the government is fairly complex and an attorney will be able to answer any questions and tell you how to proceed. He will also be able to ascertain whether there is in fact a case to answer.
It doesn't affect me
There may be some people who think that this type of fraud is harmless, the government can afford it, and it doesn't affect me, so why not turn a blind eye. Nothing could be further from the truth. The government has to pump billions of dollars into programs such as Medicare and Medicaid just to balance out the debt and in order to do this they either have to cut back on other programs and services or raise the level of taxes. In effect when another individual or company acts fraudulently against the government, they are actually committing fraud against you! Now perhaps you're starting to think a little differently?
Reporting fraud is more than just about the money. It's also about doing what is right for you, your family, and all of the American taxpayers.
