The False Claims Act is a federal statute that, among other things, allows a person with knowledge of false claims made to the United States or fraud against the United States to file a court case.
After the False Claims Act case is filed, the United States investigates the case and determines if it wants to intervene and join the action. However, even if the United States does not intervene, the person may still litigate and try the case on behalf of the United States. It is our experience that the United States does not have the resources to prosecute all cases of merit. With knowledgeable counsel, persons can successfully litigate False Claims Act cases without the United States.
If the person’s case is successful, the United States gets back the wrongfully taken money and the person who brings the case is often entitled to a reward. The reward is provided whether the United States intervenes and joins the case or the person resolves the case on their own. However, there are a few limited circumstances when a person may not be entitled to a reward—for instance, if they planned and initiated the entire scheme in the first place.
More importantly, False Claims Act cases provide a way to expose and correct wrongdoing and return money to the Treasury. In fact, Congress passed the original False Claims Act in 1863 after receiving numerous reports that the Treasury was being plundered by Civil-War era government contractors but the Government had no other law it could use to adequately address these frauds. Cong. Globe, 37th Cong., 3rd Session 955-56 (1863).
Little has changed. But while Civil War era frauds involved simple schemes to replace gun powder explosives with sawdust, modern frauds involve nuances of complex government contracts and compliance with healthcare related laws and regulations.