Overview of the FCA
Understanding the Purpose and Importance of the FCA
Attempting to curb a rash of fraud against the government, Congress passed
a law creating incentives for individuals to report government fraud.
This law, known as the
False Claims Act (FCA), was signed by President Lincoln on March 2, 1863.
Also referred to as “Lincoln’s Law” and the “Informer’s
Act,” the FCA was originally established by Congress to prohibit
certain acts intended to defraud the federal government of money. The
law specifically targeted fraudulent acts against the United States Army
during the Civil War. Although the FCA was enacted to combat the fraudulent
practices of military contractors, it applied to all government contractors.
The original FCA subjected defendants to civil
and criminal penalties. Each fraudulent claim warranted a $2000 fine in addition
to a fine of double the actual government's damages. Furthermore,
the 1863 FCA allowed private individuals, known as “relators,”
to pursue a “qui tam” action, claiming half the total recovery.
Qui tam litigation thus became a means of encouraging citizens to report
fraudulent practices that were otherwise undetected. In short, the government
promoted private enforcement of federal legislation by way of economic
history, the FCA has served as a strong deterrent for those who defraud the federal
government. The 1986 and 2009 amendments have resulted in a dramatic increase
in the number of qui tam actions filed and the amounts recovered by relators.
The price of defrauding the government is rising, the likelihood of being
caught is increasing, and the consequences are more severe. The total
monetary recoveries and cases filed to date are outlined in the chart below.
Here are some important DOJ statistics regarding the FCA:
To learn more about the FCA and to find out how the Act applies to your
case, get in touch with our
Houston civil litigation attorneys.
We are available
by phone at (832) 384-9783 and we offer
free initial consultations!