What does the False Claims Act Do?
The False Claims Act is an extension to the Dodd Frank Act and the Qui Tam provisions. It allows and actively encourages, by means of monetary rewards, every day American citizens to ‘spill the beans’ on any illegal wrongdoings they may be aware of and that could be seen as defrauding the State of money.
Remember, those people who are cheating the government are also cheating you. If the government does not have enough money in the pot, then public services are more likely to get cut.
Think about it. Are these services ones that you or your family presently use? Or are they services that you may need to use in the future? Will they still be available?
By reporting fraud to the relevant authorities, you are both safeguarding services and helping to prevent further tax increases.
Who commits fraud?
There is a long list of industries covering hundreds of different areas, which the false claims act covers, far too many to mention, but areas where fraud would appear to be easier to commit and where fraud is prevalent are:
- Medicare and Medicaid
- Social Security and Welfare
- Pharmaceutical
- Construction
The above are just a few areas and are by no means the only professionals, who seem to have jumped on the ‘bandwagon’ of its ok not to pay our dues to the government.
What’s in it for me?
The knowledge that you have done your moral duty and have saved both the government and millions of American citizen’s money. For many the promise of large financial rewards for putting their ‘necks on the block’ and informing is the key factor.
If you have evidence, proven knowledge, or just suspect fraud is being committed within your company or by an individual, you would be wise to contact experienced attorneys in this field. They will be able to talk you through the process, and explain all the pros and cons that go with becoming a whistleblower (a whistleblower is the term given to individuals who inform on others). If they feel there is a case to be answered, they will bring a qui tam lawsuit on your behalf.
The monetary rewards are dependant upon the amount of money recovered by the authorities but it is usually between 10-30% as long as the case has been proven and the amount recovered is $1million.
In a recent case, GE Healthcare agreed to pay thirty million dollars in settlement of a false claims act lawsuit, which was brought about by a whistleblower. Imagine what you could do with just 10% of $30 million!
It is estimated that over 180 different fraud cases are presently under investigation in the US, concerning pharmaceutical companies alone. To try and put a figure on the amount of money that is being defrauded is beyond most peoples imaginings, but over $4 billion was paid in settlements by just sixteen drug manufacturing companies.
Does the Reward come from Taxpayers Money?
A simple no is the answer to that question.
The actual companies or organisations that have been defrauding the government pay the whistleblower reward.
How ironic is that? If a company is found guilty and the case was proven against them under the False Claims Act they are made to pay three times the amount of damages. This allows the government to recoup not only the cost of the investigation into the fraud but also, any interest it may have lost plus the payment to the whistleblower.
Most Americans are in agreement that the False Claims act is a good thing. Anything that helps prevent government fraud and puts more money in the government coffers can only be of benefit to everyone. The added bonus of large rewards for the whistleblower and heavy fines for the culprits gains this an act much of its approval. Unless you’re a fraudster of course!
