The Federal False Claims is an important step in preventing and regulating fraud in the federal government. The Act has come a long way from being a grossly underutilized one to being a powerful tool for checking fraud.
The Federal False Claims Act is a Congressional Act that is aimed at fighting fraud at the federal government level. Although the spirit of such legislation goes back to medieval England, in the US, it was enacted during the Civil War to check fraud in supplies to the Union Army. Because of this reason, the Federal False Claims Act earned the sobriquet, "Lincoln Law". For more than 120 years since its inception, it was considered ineffective in dealing with the aim it sought to accomplish, until it was dramatically overhauled in 1986.
Provisions of the strengthened Federal False Claims Act inflict liability on those who carry out fraud against government programs. These could include persons or companies, the latter of which are normally referred to as federal contractors. Federal False Claims Act is considered an important weapon in the federal Government's arsenal in fighting fraud.
The Federal False Claims Act is based on the jurisprudential principle of qui tam and contains provisions relating to it. Qui tam essentially means, as described in the original Latin phrase, suing for both the king and one's own self. That is, this legal principle means suing on behalf of oneself while suing for the government. In fact, one of the other names of the Federal False Claims Act is "Qui Tam Statute".
The qui tam principle allows private individuals, that is, non-government associated people, to file actions on behalf of the government, even though they are not part of it. Such people are defined as "relators" in this Act. This is what is in normal parlance referred to as whistleblowing. This is a reason for which the Act is also called "Informer's Act".
The Federal False Claims Act allows such people who have successfully filed and claimed whistleblowing charges to receive a significant part of the recovered damages. This ranges usually between 15 and 25 percent of the total proceeds.
Among the major industries the Federal False Claims Act has initiated proceedings and recovered damages, the following top the list:
The Federal False Claims Act, which was considered impotent till it was given teeth by the 1986 amendment, has been successful in preventing fraud and recovering claims to the extent of nearly $40 billion in a little over a quarter of a century since this amendment.
When a person commits the following acts, they qualify as being unlawful under the Federal False Claims Act: