The False Claims Act is a federal law designed to prevent and punish fraud. It allows the government to recover money from individuals or companies that knowingly submit false claims for payment. Reach out to our experienced employment lawyer in LA County for a free case review at (310) 499-0140.
What is the False Claims Act?
Originally enacted during the Civil War, the False Claims Act remains one of the most powerful anti-fraud statutes in the United States. It targets fraud involving federal programs such as Medicare, Medicaid, defense contracts, disaster relief funds, and government grants.
What Conduct Violates the False Claims Act?
The False Claims Act prohibits more than blatant billing fraud. It covers a wide range of deceptive practices involving federal funds. A violation may occur when a person or entity:
- Submits a false or fraudulent claim for payment to the government.
- Uses false statements to obtain government funds.
- Knowingly retains overpayments from federal programs.
- Conspires to commit fraud against the government.
- Delivers less than promised under a government contract while charging full price.
The term “knowingly” includes actual knowledge, deliberate ignorance, or reckless disregard for the truth. The government does not need to prove specific intent to defraud.
How the Whistleblower Provision Works
One of the most significant features of the False Claims Act is its qui tam provision. This provision allows private individuals, often employees or insiders, to file a lawsuit under seal on behalf of the federal government. The process generally works as follows:
- The whistleblower files the lawsuit confidentially in federal court.
- The government investigates the allegations.
- The Department of Justice decides whether to intervene.
- If the case succeeds, the whistleblower receives a percentage of the recovery.
Whistleblowers may receive between 15 percent and 30 percent of the funds recovered, depending on the government’s involvement and the strength of the case. Under California law, there are protections for whistleblowers. Call our Los Angeles whistleblower lawyer to discuss your legal options.
What Protections Are There for Whistleblowers?
The False Claims Act includes anti-retaliation protections. Employers may not terminate, demote, harass, or otherwise discriminate against employees for lawful whistleblowing activity. Protected actions include:
- Reporting suspected fraud internally.
- Filing or assisting in a False Claims Act lawsuit.
- Cooperating with government investigations.
Employees who face retaliation may recover reinstatement, double back pay, compensation for special damages, and attorney’s fees.
Penalties Under the False Claims Act
Violations of the False Claims Act carry substantial financial consequences. Companies found liable may face treble damages, meaning three times the amount of the government’s loss and civil penalties for each false claim submitted.
These penalties can reach millions of dollars in large-scale fraud cases. The law is designed not only to compensate the government but also to deter future misconduct.
Why the False Claims Act Matters to Employees
If you work in an industry that receives federal funding, you may be the first person to notice fraudulent billing, inflated invoices, or misuse of government funds. Reporting concerns internally can sometimes lead to resistance, pressure, or even retaliation. The False Claims Act gives you a formal legal option to address fraud outside of your employer’s internal system.
If you are concerned about exposing misconduct, the law allows you to file a confidential lawsuit on behalf of the government while federal authorities investigate the allegations. This process helps protect your identity during the early stages of the case. Because whistleblowing can affect your career and workplace relationships, it is important to understand your rights and evaluate your options before taking action.