What is the False Claims Act?

Passed by Congress in 1863, the False Claims Act is intended to prevent people from improperly receiving benefits from the Federal Government.  Under the act, the Government or private citizens can bring a civil lawsuit to recover money defrauded from the Federal Government.

Basics of the Federal Claims Act

Under the False Claims Act, a person or entity is liable for damages when:

  1. knowingly presenting a false or fraudulent claim for payment or approval;
  2. knowingly making or using a false record or statement material to a false or fraudulent claim;
  3. having possession, custody, or control of property or money used or to be used by the Government and knowingly delivering less than all of that money or property;
  4. being authorized to make or deliver a document certifying receipt of property used or to be used by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
  5. knowingly buying or receiving public property from an officer or employee of the Government who lawfully may not sell or pledge property;
  6. knowingly making or using a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the Government; or
  7. conspiring to commit a violation of any of the above.

If the claim is successful, the liable party will be required to pay a civil penalty of at least $5,000 and no more than $10,000 plus 3 times the amount of damages which the Government sustained because of the fraudulent act.

The act does not cover tax fraud and certain actions by members of the Armed Forces, Congress, the Judiciary, and the Executive Branch.

The False Claims Act is unique because private citizens, oftentimes “whistleblowers,” can bring a case against someone on behalf of the Federal Government. If the claim is successful, the private citizen who brought the suit can receive 15-25% of the money recovered.

Things to Know If a False Claims Act Case Has Been Filed Against You

Unlike a criminal case, where guilt must be proven beyond a reasonable doubt, the burden of proof in a False Claims Act case is “preponderance of the evidence.” In laymen’s terms, this means that the party who filed the case simply has to prove it is more likely than not that the supposed acts occurred. This makes it easier for whoever filed the case to prevail.

Furthermore, it is important to know is that a complaint under the False Claims Act must be filed under seal. The person being sued does not have to be formally served through a civil service processing firm, the local sheriff’s department, or certified mail. If you have been sued, you may find out about through less formal means, such as through standard mail.

If you are a defendant in a False Claims Act case, take immediate action to protect your rights. Contact Berry Law to speak with an attorney to discuss your legal options.

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