Lawyers in our firm are continuing to look into how the False Claims Act (31 U.S.C. §§ 3729–3733) has been empowered by 2009’s Federal Enforcement and Recovery Act (FERA). Suits filed under the False Claims Act, commonly known as qui tam suits, involve persons who have knowledge of fraud being committed against the United States government. The law provides citizen-plaintiffs, referred to as “relators,” the ability to recover a portion of the amount recovered – sometimes up to 30% – for reporting instances of fraud against the United States government. Since 1986, relators have been awarded over $3.2 billion and Fiscal Year 2010 saw relators awarded $385 million.
Under FERA’s new provisions, a subcontractor or other party working with a general contractor to provide a service to the government is liable for falsely submitting claims for payment. This opens up liability to third parties and others who are not directly dealing with the government. FERA also extends protection to contractors and agents who become “whistleblowers.” This new provision was created to encourage those with knowledge of fraud to come forward and save taxpayers money from unethical companies and agents who are trying to make money off of government projects.
Unfortunately, fraud has increased even by defense contractors who are supposed to supply our troops in Afghanistan and Iraq. The Chairman of the Senate Judiciary Committee, Senator Patrick Leahy (D-VT), held a hearing earlier this year regarding the impact of FERA on the False Claims Act. It should be noted that the Department of Justice was able to recover $6.8 billion dollars since FERA was enacted. Sen. Leahy’s Committee has heard testimony from two members of the Department of Justice. Assistant Attorney General Lanny Breuer spoke on the work of the criminal division and Assistant Attorney General Tony West updated the Committee on the efforts of the civil division in recovering money for U.S. taxpayers. In just 2010 alone, $2.5 billion was recovered by the federal government from health care fraud. Senator Leahy had this to say after one of the hearings:
Americans are worried about their budgets at home. We need to protect their investment in their government. Fighting fraud and protecting taxpayer dollars are issues Democrats and Republicans have worked together to address in the past, and in these difficult economic times, we need to continue in that spirit of bipartisanship.
Lawyers in our firm who handle these cases predict that the new tools provided by FERA will create a powerful incentive for more whistleblowers to come forward and help save millions of dollars of the taxpayers’ money. For more information on qui tam suits, please contact Archie Grubb at 800-898-2034 or Archie.Grubb@BeasleyAllen.com.
Source: Sen. Leahy’s Statement to the Senate Judiciary Committee
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