The 3 Things You Need to Know About the False Claims Act

​The False Claims Act (FCA) is one of the most powerful tools in the government's efforts to fight fraud.  The FCA allows private citizens, commonly known as “whistleblowers,” to file suit against individuals or companies that have defrauded the federal government. When their efforts are successful, whistleblowers can receive monetary rewards. This article details some of the specifics of the FCA and how it can be an effective tool in your arsenal against fraud.

What is the FCA?

​The FCA is a statute that incentivizes individuals to report fraud against the government by allowing whistleblowers to earn a percentage of the money recovered when they file a lawsuit against a company they allege defrauded the government. The FCA allows private citizens to stand in the shoes of the government and file a lawsuit on the government’s behalf in a federal district court. That lawsuit is served on the United States Attorney and remains under seal outside of the public realm while the Department of Justice and other federal and state agencies investigate the allegations. Whistleblowers or “relators” are entitled to share between 15% and 30% of the government’s recovery as a reward for bringing fraud to the government’s attention.

Rewards for Whistleblowers

​If you can successfully file a False Claims Act lawsuit, you can receive between 15 and 30 percent of the money recovered by the government. This is a very large amount of money, particularly if your suit is successful against one of the largest companies in the world. The amount you collect depends on the specific settlement. While the False Claims Act was designed to reward whistleblowers, there is still no guarantee that you will be successful. Therefore, if you do decide to file a suit, you must have an experienced whistleblower attorney and a strong legal team. Because you are going up against large corporations who will have the best lawyers money can buy, you must have an equally powerful legal team in your corner.

FCA Penalties for Fraud

​Fraud against the government is not taken lightly by any means. Companies caught committing fraud against the government can face hefty fines. If a company is committing fraud and is prosecuted under the False Claims Act, it can currently be forced to pay a penalty of between $12,537 and $25,076 per false claim. This penalty is on top of the money they must pay back that they received from the government. There are a couple of important things to note concerning FCA penalties. First, an FCA penalty is required for every violation. Second, a jury determines the number of statutory FCA penalties and a judge sets the precise FCA penalty per violation.  The judge can consider many factors including, the seriousness of the misconduct, acceptance of responsibility by the defendants, and how isolated the actions were. 

Next Steps – Finding a Good Whistleblower Attorney

​A False Claims Act lawsuit is a complicated process.  Therefore, it is vital to find a good whistleblower attorney to help guide you through the process.  An experienced whistleblower attorney can advise you on the merits of your case, the entire process in great detail and advise you on how to proceed should you decide to go forward and blow the whistle. In fact, speaking to an experienced whistleblower attorney may make you feel more at ease about blowing the whistle.

Timothy L. Miles

Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles was recentely selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association, a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019).