Basic Overview of the FCA

The FCA's basic framework for the prosecution of false claims is not difficult to understand. The FCA makes it unlawful for individuals to knowingly use or cause someone to use false information to obtain, retain, or cause the government to spend government funds. [FN5] The FCA does not require specific intent to defraud. [FN6] Instead, "knowingly" under the FCA means that the defendant "has actual knowledge of the information[,] . . . acts in deliberate ignorance of the truth or falsity of the information[[,] . . . or . . . acts in reckless disregard of the truth or falsity of the information." [FN7] The Act specifically imposes liability on two classes of persons: those who knowingly present, or cause to be presented a false or fraudulent claim for payment or approval, and those who knowingly make, use, or cause to be made or used a false record or statement material to a false or fraudulent claim. [FN8]

*108 Violators of the False Claims Act face civil penalties between $5,000 and $10,000 in addition to triple the damages that the violations caused the government. [FN9] A notable feature of the False Claims Act--and the feature to which most of the Act's success is attributed--is that any private person with knowledge of government fraud, known as a "relator" under the FCA, may bring a civil action on behalf of the government for a violation of the Act. [FN10] And that is where the simplicity ends.

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[FN5]. s 3729(a).

[FN6]. s 3729(b)(1)(B).

[FN7]. s 3729(b)(1)(A).

[FN8]. s 3729(a)(1)(A)-(B). These are the most frequently used provisions under the FCA, which are commonly known as the false claim and false statement provisions, respectively. The FCA also holds a person liable who:

(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G); (D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property; (E) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true; (F) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property; or (G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.

s 3729(a)(1)(C)-(G).

[FN9]. s 3729(a)(1); see S. Rep. No. 99-345, at 11 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5276 (quoting and endorsing the court's statement in United States v. Griswold, 24 F. 361, 366 (D. Or. 1885) that the statute is "remedial" in nature); see also Cook Cnty. v. United States ex rel. Chandler, 538 U.S. 119, 131-32 (2003) (stating that the False Claims Act provided "make-whole recovery beyond mere recoupment of the fraud" and that treble damages "do[] not equate with classic punitive damages").

[FN10]. s 3730(a)-(b). The genesis and importance of this private-enforcement mechanism in American jurisprudence dates back to the Civil War. See Evan Caminker, Commentary, The Constitutionality of Qui Tam Actions, 99 Yale L.J. 341, 351 (1989).