Things You Should Know About the False Claims Act

The False Claims Act is extremely useful for recovering taxpayers’ dollars in the United States. One can also play an active role in safeguarding the interests of the ordinary public by using this law. It is possible to keep a check on the unsafe conduct of government contractors through the False Claims Act. ‘Qui tam’ or whistleblower lawsuits filed under the False Claims Act help a great deal in ways such as:

  • It is possible to protect interests of patients undergoing substandard healthcare at a hospital. A lawsuit brought under the False Claims Act can be used to protect patients from
    • Drugs that are potential dangerous in one way or the other.
    • Medical equipment used by the hospital that fails to comply with all safety regulations.
  • The False Claims Act can also be used to protect interests of consumers. For example, a lawsuit can be brought under this act to protect consumers from paying inappropriate prices for services/goods.
  • This act can also be used to save interests of military personnel. A lawsuit can be brought under this act to save them from flawed equipment. Such equipment can lead to the loss of lives.
  • If a company has been utilizing natural resources without paying adequate compensation, a lawsuit can be brought under the False Claims Act. It is also possible to file a lawsuit under this act against commercial entities that feign their conformity with applicable environmental protection laws.

Until now, the False Claims Act has been used to expose a large number of damaging practices. The list of some notable examples is compiled below:

  1. Medicaid and Medicare fraud.
  2. The manufacturing of flawed tools that was to be used by the military personnel.
  3. Prescribing & performing medical procedures on patients that were completely needless.
  4. The practice of using unsafe or flawed equipment in the healthcare sector.
  5. The practice of exploiting natural resources from public lands without paying appropriate compensations in return.
  6. Lender fraud concerning SMEs and mortgages.
  7. The practice of giving low quality care to residents at various nursing homes.

The government penalizes the defaulter dearly. The violator of the False Claims Act has to pay as much as 3 times the total amount of damages incurred to the government. For every lawsuit filed under the False Claims Act, the government also imposes a civil penalty of 5,500 – 11,000 USD.

The whistleblower receives a good reward from a successful lawsuit brought under the False Claims Act. Of the total amount recovered by the government from the defendant, up to thirty percent is paid to the whistleblower as a reward. The actual reward depends up on a number of parameters. The reward is decided on the basis of whistleblower’s total contribution towards the prosecution of the False Claims Act case against the government contractor in question. For a successful case, a whistleblower is also compensated for attorney’s fees and associated costs. This amount is also recovered from the defendant.