Hare, Wynn, Newell & Newton - June 2020

June 2020

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LIABILITY UNDER THE FALSE CLAIMS ACT The False Claims Act holds fraudsters liable in a variety of ways. Liability is statutory and is based upon a violation of one of the seven subsections of the FCA found in 31 U.S.C. §3729(a)(1). The primary violations are:

histleblowers are vitally important during a time of national crisis. The False Claims Act (FCA) is the primary weapon used by the

Department of Justice to combat fraud on the federal government. It was written by President Abraham Lincoln during another time of national crisis: the American Civil War. Lincoln wrote the law to enlist the public as private attorneys general to combat rampant defense contracting fraud undermining the army. The FCA empowers private citizens with knowledge of fraud on the federal government to hire a lawyer and file suit on behalf of the United States to recover funds wrongfully taken fromour federal treasury. For the whistleblower’s efforts in exposing and providing evidence of the fraud, the whistleblower can be awarded between 15%–30% of the government’s recovery. REPORT COVID-19 RELIEF BILL FRAUDSTERS During the time of the COVID-19 crisis and the $2.2 trillion relief bill enacted by Congress to address the economic impacts of the virus, unscrupulous businesses and individuals are likely to try and take advantage and wrongfully obtain our tax dollars that were meant to help those truly in need. This fraud may come in many forms: fraudulently claiming eligibility on an application for loans or grants for which the person or business does not qualify; obtaining payroll protection loans and then fraudulently claiming the business met the requirements to have the loans forgiven; fraudulently providing equipment or supplies the government has ordered to combat the virus; falsifying quality tests for equipment ordered by the government to combat the virus; and fraudulently claiming eligibility for relief funds for which an individual or business does not qualify. We need courageous whistleblowers to step forward and report this type of fraud.

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;

(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 U.S. 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. DAMAGES If a defendant is found guilty of violating one of the seven false claim subsections, 31 U.S.C. §3729(a) provides that the court shall assess “three times the amount of damages which the government sustains because of the act of that person ...” The calculation of damages is simply stated — that is damages are the difference between what the government actually paid minus what the government either received or should have paid had the claim or

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