Overview of the FCA

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 incentives..

Throughout its 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: http://www.taf.org/DOJ-FCA-Statistics-2014.pdf

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!

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