The False Claims Act’s Liability Provisions (Part 3 of 7): Conspiracies

The False Claims Act has seven liability provisions. Attorneys use some in almost every case, while others are rarely used. In a series of posts, each provision will be discussed.

The Act’s third liability provision is 31 U.S.C. § 3730(a)(1)(C), which provides that “any person who conspires to commit a violation” of the False Claims Act is liable.

Simplified Example: Prime Contractor contracts to supply spare parts to the United States. Prime Contractor purchases components for the parts from Subcontractor. Prime Contractor’s contract with the United States requires that components be inspected before installation into the spare parts. The components do not pass inspection. Prime Contractor discusses the issue with Subcontractor and they decide to use the components anyway. Prime Contractor ships the bad spare parts to the United States.

Conspiracy liability under the federal False Claims Act arises “whenever a person conspires to violate any of the provisions in Section 3729 imposing FCA liability.” S.Rep. 110-517, at 16-17 (2008). The elements of a conspiracy claim may vary, but generally, it must be shown that: (1) the defendant conspired with one or more persons to commit a violation a provision of the False Claims Act; and (2) one or more conspirators performed any act to effect the object of the conspiracy. United States v. President & Fellows of Harvard College, 323 F. Supp. 2d 151, 196 (D. Mass. 2004); 31 U.S.C. § 3729(a)(1)(C). See also United States ex rel. Decesare v. Americare in Home Nursing, 757 F. Supp. 2d 573, 586 (E.D. Va. 2010).

In practice, False Claims Act conspiracies are often duplicative actions. This is because of the breadth of the False Claims Act’s other liability provisions, which target those who cause the submission of false claims.

Nevertheless, under some circumstances, bringing a conspiracy claim can be very useful. For example, sometimes a defendant might plead guilty or be found guilty of a criminal conspiracy targeting the same actions at issue in the False Claims Act suit. When this happens, that defendant may not be able to deny their liability for a civil False Claims Act conspiracy. See United States ex rel. Miller v. Bill Harbert Int’l Constr., Inc., 608 F.3d 871, 890-91 (D.C. Cir. 2010).

If you know of persons conspiring to commit fraud against the United States or cheating the Government, protect yourself and explore potential remedies. You can obtain guidance from experienced legal counsel by contacting us.