The False Claims Act is a federal statute that penalizes any person who defrauds the federal government. The Department of Justice states that the law, found at 31 U.S.C. §§ 3729 - 3733, was originally enacted in 1863 to combat defense contractor fraud during the American Civil War. The statute allows the United States to pursue perpetrators of fraud directly.
Penalties and liability
According to the Department of Justice, any person who knowingly submits a false claim to the government, or causes one to be submitted, violates the law. Violators are liable for three times the amount of the government’s damages, along with an additional penalty that is linked to inflation. The law also covers situations where someone knowingly uses a false record material to a false claim, improperly avoids an obligation to pay the government, or conspires to commit these acts.
Private citizen lawsuits
The False Claims Act allows private citizens to file civil lawsuits on behalf of the government against those who have defrauded it. These legal actions are called “qui tam” suits. An individual initiates this process by filing a complaint alleging financial fraud in a federal court.
Requirements for citizen lawsuits
Filing a False Claims Act lawsuit involves specific procedural requirements. The Department of Justice notes that the initial complaint must be filed under seal, and many individuals choose to obtain legal counsel before proceeding. Private citizens who successfully bring these actions and secure a financial recovery for the federal government are entitled to receive a portion of the recovered funds. Many of the Department of Justice Fraud Section investigations and lawsuits arise from these citizen filings.
Agency inspectors general
Instead of filing a federal lawsuit, individuals who have knowledge of fraud against the federal government or federally funded entities can report it to an agency Inspector General. Every federal agency has an Inspector General tasked with investigating fraud committed against that agency. The Council of the Inspectors General on Integrity and Efficiency maintains a directory of these officials, including their hotline numbers and addresses, and provides a centralized reporting tool.
Specific fraud reporting channels
The government maintains specialized channels for certain types of fraud. Pandemic-related fraud, including the mismanagement of federal financial assistance and stimulus programs, can be reported online to the Pandemic Response Accountability Committee. Health care fraud can be reported through an online complaint or by calling a dedicated hotline at 1-800-HHS-TIPS. Cyber fraud should be reported directly to the Inspector General of the defrauded federal agency, while general federal fraud can also be reported to the Federal Bureau of Investigation through its tips webpage or local offices.