The False Claims Act (FCA) is one of the most powerful tools the federal government has to combat fraud and recover stolen taxpayer funds. If you’re an insider who has witnessed fraudulent billing, misuse of federal funds, or schemes to cheat the government, the FCA gives you the legal means to do something about it — and rewards you for your courage. Thanks to our friends at Law Offices of Darth M. Newman for this article highlighting the False Claims Act and how you may be impacted in whistleblower cases.
The Origins Of The False Claims Act
The FCA was originally enacted during the Civil War in 1863 under President Abraham Lincoln. At the time, unscrupulous contractors were selling the Union Army faulty weapons, spoiled food, and lame horses. In response, Congress passed the FCA to empower whistleblowers — often called “relators” — to sue on behalf of the government and share in any recovery.
While the law fell into disuse for a time, it was revitalized in 1986 with a set of sweeping amendments that created the modern framework we use today. These changes came in response to widespread fraud in defense contracting and were designed to incentivize individuals with inside knowledge to step forward.
What Constitutes A “False Claim”?
A false claim is any knowingly fraudulent or misleading request for payment from the government or a federally funded program. Common examples include:
- Overbilling Medicare or Medicaid
- Submitting charges for services never rendered
- Falsifying eligibility for federal loans or grants
- Providing substandard or defective goods to federal agencies
- Double billing or inflating invoice amounts
It’s important to note that intent to defraud isn’t always required. Under the FCA, a claim can be considered false if it is made with reckless disregard or deliberate ignorance of the truth.
The Qui Tam Provision: Empowering Whistleblowers
One of the FCA’s most distinctive features is its qui tam provision, which allows private citizens to file a lawsuit on the government’s behalf. This is crucial, because much of the fraud committed against the government is hidden — and it often takes someone inside the organization to bring it to light.
If the case is successful, the whistleblower can receive between 15% and 30% of the government’s total recovery. In recent years, this has resulted in multi-million-dollar awards for individuals who exposed fraud in the healthcare, defense, and financial industries.
What Happens After You File?
Qui tam lawsuits are initially filed under seal, meaning they’re kept confidential while the Department of Justice (DOJ) investigates. The government then decides whether to intervene (take over the case) or allow the whistleblower’s legal team to pursue it independently.
Regardless of whether the government intervenes, whistleblowers are entitled to their share of the recovery if the case is resolved successfully through settlement or judgment.
Protections For Whistleblowers
Blowing the whistle is a brave act — and one that can come with professional risk. That’s why the FCA includes strong anti-retaliation provisions, making it illegal for employers to fire, demote, harass, or otherwise discriminate against whistleblowers.
If retaliation does occur, the law allows whistleblowers to sue for reinstatement, double back pay, attorney fees, and other damages.
Why The FCA Matters
Each year, billions of taxpayer dollars are recovered under the False Claims Act thanks to whistleblowers. These funds are returned to public programs like Medicare and Medicaid, strengthening the integrity of the federal system and ensuring that fraudsters are held accountable.
If you believe your employer or another entity is defrauding the government, don’t stay silent. Consult with an experienced whistleblower lawyer to understand your rights, explore your options, and potentially play a crucial role in exposing fraud — while also protecting yourself and being justly rewarded.