False Claims Act
Where the wrongdoing involves conduct that cheats the U.S. Government or causes the wrongful expenditure of U.S Government funds, a whistleblower may be entitled to bring suit under the Federal False Claims Act. Where the conduct cheats state or city governments out of money or deprives them of the products and services that they contracted to buy, the whistleblower may have a right of action under state or municipal false claims acts. There are twenty-nine states that have enacted false claims acts and at least two municipalities, New York and Chicago, have false claims laws.
A false claims statute allows the whistleblower to bring the suit in the name of the government, even where the whistleblower is not personally injured. Where the suit is successful, the whistleblower is entitled to a bounty, which can range from between fifteen-thirty percent of what is ultimately recovered for the Government.
Where the whistleblower is retaliated against for his/her investigation or efforts to disclose the wrongdoing, false claims statutes also provide legal redress for the whistleblower to bring suit against the entity or person that engaged in retaliation. Sometimes these provisions allow for the whistleblower to recover as much as two times his/her damages plus his/her attorneys’ fees.
The False Claims Act (nicknamed the “Lincoln Law”) dates back to the civil war which was marked by fraud at all levels, federal, state and confederacy. Even then contractors sold sick horse and mules, defective weapons and spoiled food in an effort to defraud. Today, federal government, many states, some larger cities and the District of Columbia have developed False Claims Acts to fight fraud.
The following states now have False Claims Acts qui tam laws
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