Chilivis Grubman attorneys frequently discuss the federal False Claims Act (“FCA”) and how it is a powerful tool used by the federal government to combat fraud.  The government routinely collects over a billion dollars annually in settlements and judgments from FCA enforcement actions. 

The FCA prohibits any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government.  It also prohibits the possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivering, or causing to be delivered, less than all of that money or property.  31 U.S.C. § 3729 (a)(1)(D).  The FCA further prohibits any person from knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim.  And under the qui tam provisions of the FCA, whistleblowers (also known as relators) may bring cases on behalf of the government, who may takeover, or intervene.  

The FCA allows the government to recover three times its actual losses (treble damages).  Defendants also face penalties for each violation of the FCA, such as each false statement or each false claim submitted or caused to be submitted.  Penalties are adjusted for inflation.  Since 2016, the inflation adjustments have occurred annually.  2021 is no exception.  On December 13, 2021, the U.S. Department of Justice adjusted the FCA’s per-claim penalty for inflation as part of the Civil Monetary Penalties Adjustment for 2021.  Per-claim penalties will now fall between $11,803 and $23,607 for each violation.  Importantly, for violations after November 15, 2015, penalties are calculated based on the penalty amounts in effect when the penalties are assessed.

The government can use the FCA as a tool against any company in any industry that does business with the federal government.  In healthcare FCA cases, the penalties can be astronomical due to the volume of claim submissions, as each claim submitted is a violation.  FCA penalties can be far greater than actual damages, leading some defendants to argue that the disproportionate penalty-to-damage ratio violates the Eighth Amendment.  Chilivis Grubman discussed such a case where the defendant had only $2,266.62 in damages and penalties over $1.1 million. 

The attorneys at Chilivis Grubman represent both companies and individuals in connection with government investigations, both criminal and civil, and in False Claims Act litigation.  If you have any questions related to such matters, please contact us today.