False Claims Act

Signed into law by Abraham Lincoln
March 02, 1863

The False Claims Act, sometimes called the Lincoln Law, was enacted in 1863 to combat fraud against the government and its troops during the Civil War. Today the FCA imposes civil liability on anyone (including corporations) who knowingly uses a “false record or statement" to get money from the government via fraud, or who conspires to do so. Violators of the FCA face treble damages and a civil penalty of $5,500 to $11,000 per occurrence.

The FCA’s "qui tam" provision, § 3730(b), allows a private person known as a relator (colloquially, a whistleblower) to bring an action on behalf of the United States government. A successful relator may receive a reward of up to 30 percent of the proceeds, plus reimbursement for attorneys’ fees, costs, and expenses. The FCA also contains a robust anti-retaliation provision that protects individuals who report or oppose violations of the FCA.

Enforcement & Remedies

The False Claims Act allows individuals to file a "qui tam" lawsuit against persons (and companies) who commit fraud against the government. Qui tam actions are filed under seal and must remain so for at least sixty days. Unlike a regular lawsuit, a qui tam action is not served on the defendant, at least not immediately. Instead, the complaint and a document known as a “relator’s statement” are served on the DOJ, which then use the period under seal to investigate the relator’s claims.

Once the DOJ completes its investigation the government has three options: 1) intervene as the plaintiff on one or more claims; 2) decline intervention; or 3) move to dismiss the complaint. If the government intervenes, its attorneys act as lead counsel .

Once the government makes its intervention decision, the matter is unsealed and proceeds much like any other lawsuit. If the government declines to intervene, relators may pursue the claims on their own. The government intervenes in roughly one in four cases.

A person who brings a successful lawsuit can receive a reward of up to 30% of the government’s recovery plus reimbursement for reasonable attorneys’ fees.

The FCA’s anti-retaliation provision, 31 U.S.C. § 3730(h) protects employees who engage in one or more lawful acts in furtherance of a qui tam claim or who engage in lawful efforts to stop a violation of the FCA. The FCA protects people who do not even know that it exists. A prevailing whistleblower is entitled to “all relief necessary to make that employee, contractor, or agent whole,” which includes reinstatement, double back pay, interest on the back pay, special damages, and attorney’s fees and costs.”

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