OCTOBER 26, 2023. Happy Anniversary to the 1986 False Claims Act Amendments, which turn 37 today! Known as the most important tool that U.S. can use to recover funds misspent due to fraud against the government, these amendments are the heart of qui tam cases and are the taxpayer’s best friend.
What is the False Claims Act?
The False Claims Act itself dates back to the Civil War era, when Congress passed legislation under President Lincoln to help the federal government recover funds stolen by government contractor fraudsters. They would sell horses and mules in ill health, malfunctioning rifles, and spoiled food and provisions to the Union Army, and would falsify the quality of these goods on records for the sake of making a profit, putting their interests before those of the country. Fraudsters today act similarly, even if they’re not selling livestock or hardtack.
As they have evolved, so has the False Claims Act, though keeping the nickname, “Lincoln’s Law.” It now has the power to hold accountable people and companies that spend taxpayer funds. Penalties have been raised at different intervals throughout history, just as the role of the whistleblower has been further codified and protected. The False Claims Act contains a qui tam provision, which allows citizens and non-citizens to pursue legal action on behalf of the government. If their case is successful, they may receive a percentage of the recovery.
In its modern iteration, the purpose of the False Claims Act is to:
- Recover misspent taxpayer money
- Deter future misspending of taxpayer money
- Strengthen companies’ compliance programs
- Provide financial incentives to individuals who blow the whistle
- Protect whistleblowers from retaliation
What are the False Claims Act Amendments of 1986?
The Amendments of 1986 increased incentives for pursuing qui tam actions, with a private citizen plaintiff, the relator, at the helm. Notable changes include:
- Increased the amount of money a relator would receive
- Broadened reasons for bringing a qui tam suit
- Increased relator’s role in litigation
Because of the amendments, a whistleblower who files a successful whistleblower claim is paid a financial award in the amount of between 15 and 25 percent of the total defrauded funds that are recovered by the government if the government agrees to intervene in the case. In cases where the government does not join or declines to intervene and the qui tam relator and their attorney pursue the case on their own on behalf of the government, the whistleblower is eligible to receive up to 30 percent of the successfully recovered funds.
The FCA Amendments in Play Today
The False Claims Act Amendments expanded the act’s scope, allowing for more cases to be brought under the qui tam provisions. In addition to being for health care fraud, the False Claims Act is the government’s civil tool to redress false claims involving a multitude of other government operations and functions. According to the Anti-Fraud Coalition, Fiscal Year 2022 saw a record 948 cases filed by both the government and whistleblowers under the act, with 652 of those exclusively from whistleblowers. Because of their work, qui tam actions recovered almost $2 billion last year, for a total of almost $50.4 billion since the 1986 amendments were implemented. These amendments empower citizens to do the right thing and expose those who defraud the federal government and the American taxpayer.
If you would like to report fraud in government-funded programs, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net.