NYC Criminal Attorney Explains The False Claims Act
Fraud against the government is taken very seriously. The federal government can become involved in taking legal action against any individual or business suspected of fraud against the government. The False Claims Act, which is codified in 31 U.S. Code Sections 3729 to 3733 is the primary federal law used to fight fraud. Anyone who is accused of engaging in fraudulent behavior could face civil actions under the False Claims Act (FCA), as well as potential criminal liability. The civil penalties imposed by FCA can be financially devastating.
Bukh Law Firm, PLLC has extensive experience providing legal representation to clients who are faced with civil lawsuits under the False Claims Act. These lawsuits can be brought by federal officials, but can also be brought by individual whistleblowers who believe they have evidence of fraud or wrongdoing. Defending against the imposition of civil penalties is essential no matter what type of False Claims Act lawsuit you are facing, and you need to devise a strategic and effective response to both civil actions as well as any criminal accusations against you.
What is the False Claims Act?
The False Claims Act refers to federal statutes found in 31 U.S.C. §§ 3729 – 3733. The Act dates back to 1863, when Congress passed the FCA as a result of concerns the Union Army was being defrauded by suppliers of goods during the Civil War. At the time the Act was passed, the law imposed penalties equal to $2,000 plus double the government’s damages when a false claim was submitted knowingly to the government.
The FCA has been amended multiple times since its initial passage, with penalties increased significantly. The basic purpose of the Act, however, remains the same. The purpose is to allow the government to obtain civil penalties for fraudulent claims made to the government. There is a lower standard of proof for civil cases, compared with criminal cases, so the government is able to recover money paid out as a result of fraudulent claims without proving beyond a reasonable doubt that a fraud was committed.
What Behaviors are Prohibited Under the Federal False Claims Act?
The Federal False Claims Act prohibits a variety of different types of conduct including:
- Knowingly presenting a false or fraudulent claim to the government for payment, or knowingly causing such a claim to be presented.
- Knowingly making, or causing to be made, false records or material false statements in connection with fraudulent claims.
- Reverse false claims, such as improper conduct aimed at avoiding payment to the government or improper refusal to repay an overpayment made by the government.
- Knowingly withholding any money or property belonging to the government.
- Making or delivering a document (which you have authority to provide) certifying receipt of government property to use or be used, without actually knowing if the information being provided is true.
- Knowingly purchasing or receiving public property from any government employee, officer, or Armed Forces member who isn’t permitted to sell the property.
Conspiring to engage in any of these types of conduct can also result in penalties under the FCA. It is also important for defendants to be aware that the False Claims Act has a permissible knowledge requirement, with knowledge defined broadly. To be held liable under the False Claims Act, a defendant did not have to have actual knowledge of the fact claims were false or material misstatements were being made. Deliberate ignorance and reckless disregard can also satisfy the knowledge requirement in the False Claims Act Statute and can make a defendant vulnerable to penalties. A False Claims Act lawyer can help you try to make it difficult for a prosecutor to prove the knowledge requirement is met, but you should act assertively to begin building your defense right away.
Types of Fraud Resulting in False Claims Act
Making or presenting false claims, or making or causing false statements to be made, are the most common behaviors that result in False Claims Act cases. Examples of situations which could result in a False Claims Act case include:
- Contracting Fraud
- Defense Contracting Fraud
- Public Construction Projects Fraud
- Grant and Scientific Research Fraud
- Procurement Fraud
- Falsely Claiming Citizenship
- Fraud in Connection with Federal Housing Administration Matters
- Medicare False Claims Act Fraud or other fraud in connection with federal health programs.
Anyone who is involved in a scheme to provide false statements, or to make false claims, can potentially be liable for damages under the False Claims Act. Because of the prohibition against causing false claims to be submitted, contractors and other entities and individuals can also be exposed to liability under the False Claims Act. You could face very significant risk of financial exposure even for tangential involvement with a fraudulent claim, so you need to ensure that you get appropriate legal help from a False Claims Act attorney to protect your interests.
How Does the False Claims Act Work?
The False Claims Act is intended to allow not only civil actions by the government, but also civil actions by whistleblowers or private citizens who become aware of fraud being committed against the government.
The U.S. Attorney General can file a false claims act lawsuit if there is a reason to suspect wrongdoing. Individual businesses or entities can also file a lawsuit, which is called a Qui Tam Lawsuit. When a Qui Tam lawsuit is filed, this is an independent suit brought by the individual who believes there is evidence the government is being defrauded. The filing of a Qui Tam Lawsuit can trigger an independent investigation by the government, which will determine whether to intervene in the suit or not. If the government does not intervene, the case can go forward to trial.
When an individual files a Qui Tam lawsuit and the government is able to recover money that was paid out because of fraud, the plaintiff who filed the suit can get up to 30 percent of the money the government recovers. People have obtained millions of dollars by filing lawsuits under the False Claims Act, and there is huge financial incentive for anyone who suspects any type of wrongdoing to come forward and pursue a claim.
False Claims Act Penalties
The False Claims Act is a very powerful tool for the government in fighting fraud. Defendants who are faced with a False Claims Act case could be forced to pay mandatory triple damages- which means paying back at least three times the amount obtained from the government as a result of the fraud. This can be reduced to mandatory double damages if companies come forward to self-report fraudulent behavior.
Depending upon the nature of the fraud, defendants could also face additional mandatory civil penalties of up to $11,000 per claim. When the False Claims Act case arises out of claims for reimbursement from the federal government, each invoice submitted to the government can be considered a separate false claims. The penalties, therefore, can add up very quickly.
While there are no criminal penalties under the False Claims Act, the financial devastation from losing a case can be enormous. Defendants could also face various criminal charges for fraud under other federal laws related to their prohibited conduct. A False Claims Act lawyer can provide assistance in understanding what laws are being applied against you and in developing an effective strategy to respond to all legal issues.
How a False Claims Act Attorney Can Help
A False Claims Act lawyer can provide invaluable assistance as you respond to allegations being made that you tried to defraud the government. Your attorney can try to help you negotiate an out-of-court resolution when a civil case is filed, which could sometimes result in a lesser financial penalty. False claims act attorneys will also provide assistance in building defenses.
You could try to make it impossible for a prosecutor to prove you acted knowingly in causing false claims to be submitted, or could try to introduce questions about whether fraud against the government even occurred. Because of mandatory penalties, the stakes are very high and you need to decide how best to minimize your potential financial exposure as soon as accusations of fraud are made.
Bukh Law Firm, PLLC is a New York City criminal defense law firm with extensive experience in Medicare False Claims Act cases as well as in many other cases where defendants have been accused of trying to defraud the government. Our legal defense team can provide you with invaluable assistance in trying to fight against accusations being made against you so you can protect your finances. We are prepared to help with defense in civil and criminal cases, so give us a call as soon as possible so we can get started.