The False Claim Act (FCA) is the primary means to fight fraud perpetrated against the government. The FCA imposes civil and criminal liability for knowingly making a false or fraudulent claim to the United States for money or property; or to avoid an obligation to pay money (reverse false claim). 31 U.S.C. §§ 3279-3733.

Due to the emphasis on enforcement of the FCA, the U.S. Department of Justice (DOJ) reported that it recovered over $3.5 billion in settlements and judgments from claims arising under the FCA during fiscal year 2015. Since January 2009, the DOJ has recovered more than $26.4 billion. Whistleblowers alone filed 638 "qui tam" suits in 2015 and were awarded $597 million during the same period.).

FCA claims have been on the rise as the government, in collaboration with other governmental agencies such as the Centers for Medicare and Medicaid Services and Health Care Fraud Prevention & Enforcement Action Team, continues to crack down on fraud, waste and abuse in order to protect valuable taxpayers' dollars. Thus, the key is to be proactive in managing the risk before an FCA claim is made against you.

Fraudulent activities against the government

Under the FCA, the government may bring its own action or may intervene in the existing qui tam complaint, a private right of action brought by a whistleblower (relator) against an individual or company accused of engaging in fraudulent activities against the government. A qui tam lawsuit is filed in camera and remains under seal for 60 days, giving the DOJ an opportunity to investigate the allegations and decide whether it will join in the case. 31 U.S.C. § 3730(b)(2). If after completing its investigation the government does not pursue the case, the relator with knowledge of the fraudulent activity, can proceed with the case on the government's behalf.