False Claims Act Recoveries – No Longer Just a Federal Affair
March 6, 2014
By: Lindsay Simmons
For more than eight years – since the Deficit Reduction Act of 2005 – Congress has been incentivizing states to enact anti-fraud legislation modeled after the federal False Claims Act (FCA). While many states long ago enacted civil false claims acts that focused on Medicaid fraud, at least as of 2005 few states had broader statutes modeled on the federal FCA. This has changed and continues to change, signaling an important new challenge for those doing business at the state, local and municipal level. An ever-growing number of states have enacted state versions of the federal False Claims Act.
The FCA provides for penalties and triple damages for anyone who knowingly submits or causes the submission of a false or fraudulent claim to the United States for government funds or property. Under the FCA’s qui tam provisions, a person with evidence of fraud – known as a whistle blower or relator – can sue, on behalf of the government, those engaged in the fraud and share in any money the government may recover. As our readers know, the federal government has recovered billions of dollars under the FCA. The states hope to do the same. Attorneys General who have the statutory ability to pursue false claims are increasingly using their false claims acts to aggressively pursue a wide range of fraud, including even wage and hour violations.
In order for whistleblowers to receive a reward for their contributions to the recovery of state funds, most states require the whistleblower to bring a qui tam lawsuit against the company or individual defrauding the state.
States with false claims acts that apply to fraud involving a broad range of state-funded programs include California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Rhode Island, Tennessee, Virginia, and the District of Columbia.
If you are doing business at the state, local or municipal level, be mindful of any applicable state false claims act provisions.
Lindsay Simmons is the attorney responsible for the content of this article.
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