False Claims Act

If you went to the store today and bought a loaf of bread, wouldn't you expect that the ingredients listed (wheat flour, butter, salt, yeast) were accurate? Of course. But what if you found later that you had actually been paying for non-nutritional "fillers" such as sawdust? You would be outraged, of course. This type of scenario on a much larger scale occurred in 1863 when President Abraham Lincoln realized that persons were defrauding the government by selling the Union Army supplies that were defective or not as advertised. Thus, the False Claims Act came into being.

The False Claims Act allows citizens to "blow the whistle" on companies or individuals (though usually the former and not the latter) who are defrauding the government. In today's world, this often takes place when an employee realizes its employer is practicing illegal activities. Under the False Claims Act, that employee can file a lawsuit against the company with the government.

Of course, many employees don't want to be labeled by their employers; thus, the False Claims Act has given permission for "qui tam" lawsuits to be filed. These are sealed and investigated without the defendants realizing that they are being investigated. Thus, the "whistleblower" is not retaliated against (at least not as long as the claim is sealed.)

The False Claims Act has been revised little since Lincoln instituted its practice in the mid-1800s. However, President Ronald Reagan did modify it to make it even more "user friendly" during the mid-1980s. Now, whistleblowers are entitled to 15-30% of any monetary restitution settlement (previously, it was as little as 10%) made by the defendants in False Claims Act lawsuits. They may also get attorney's fees and other costs associated with their claims.

The False Claims Act has also been greatly boosted by the 2002 Sarbanes-Oxley Act (SOX), a result of the Enron Scandals. SOX basically gives all whistleblowers guaranteed protection and/or restitution against any retaliatory measures taken by the employers' on whom they "blew the whistle." That way, whistleblowers are given more power than they had before, hopefully encouraging more to step forward and report government fraud.

As a law firm that prides itself on its dedication to consumer advocacy and plaintiff's rights, we are heartened by SOX, which has given new life to the False Claims Act. If you have information on any illegal activities, we encourage you to contact our team of legal professionals today. Help yourself, and help your country.

8/8

Comment on this Topic
Your Name:
Your E-mail:
Comments:
	.
	Please enter the security code (characters in this image) into the field below for security purposes
Security Code: