The False Claims Act (FCA), or “Lincoln Act,” is the federal law that provides criminal and civil penalties for falsely billing the government, overrepresenting the quantity of a product delivered, or understating an obligation to the government. The False Claims Act can be enforced either by the Department of Justice or by individuals in a qui tam proceeding. The law was enacted in 1863 during the Civil War to combat fraud against the government by providers of goods and services.
The FCA allows individuals, known as whistleblowers or “reporters”, to bring lawsuits on behalf of the government to recover damages and penalties from those who have made false claims. If the lawsuit is successful, the whistleblower may receive a percentage of the recovered funds as a reward.
The FCA covers a wide range of false claims, including:
– Overcharging the government for goods or services
– Providing substandard goods or services to the government.
– Submitting false records or statements to the government
– Falsely certifying compliance with government regulations
– Hide or avoid payment of obligations to the government
Violations of the FCA can result in significant financial penalties, including treble damages (three times the amount of damages suffered by the government). Additionally, individuals held liable under the FCA may be barred from doing business with the federal government.
The FCA has been amended several times over the years, most recently in 2010 with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law remains an important tool to combat fraud against the government and protect taxpayer money.
