1. 31 U.S. Code § 3729 - False Claims
2. Reduced Damages
3. Costs of Civil Actions
4. Definitions

The False Claims Act Statute is a federal law that imposes liability on those who defraud programs hosted by the federal government. The statute is the main tool used by the federal government for litigation against individuals and companies who commit fraud.

31 U.S. Code § 3729 - False Claims

The False Claims Act Statute is found in U.S. Code § 3729, which goes into more detail about false claims and how individuals or companies will be held liable for certain acts. It outlines that anyone who commits any of the following acts is liable for a penalty of at least $5,000 and up to $10,000, payable to the US. Government. The regulations for these liabilities are found in the Federal Civil Penalties Adjustment Act of 1990, or 28 U.S.C. 2461, under Public Law 104-401 (1). The act further allows the government to collect three times the damages sustained by the act of the individual who has made false claims or committed fraud. The acts for which someone may be held liable include:

  • Knowingly and intentionally presents a fraudulent or false claim for approval or payment.
  • Knowingly and intentionally causes to be used or made, uses, or makes a false statement or record as material for a fraudulent or false claim.
  • Conspiring to break any law related to making claims.
  • Having control, custody, or possession of money or property to be used or currently used by the government and knowingly causes to be delivered, or delivering less than all of the property or money.
  • Holding authorization to deliver or make a document that certifies the receipt of property that is to be used by the government and delivers or produces the receipt without knowing for certain that the information included on the receipt is true.
  • Knowingly receiving or purchasing property from a governmental employee or officer or member of the Armed Forces who is not legally authorized to pledge or sell that property.
  • Knowingly concealing or avoiding an obligation to pay the government, or using or making a false statement or record about the obligation to transmit or pay money or property to the government.

Reduced Damages

In some cases, the court may find that an individual or company is eligible for a reduced damages sentence. If the court determines that any of the following apply, the individual or company may qualify for lower damages:

  • The individual who violated the false claims laws provided information to United States officials about the violation within 30 days of when the information was provided to the defendant.
  • The individual fully cooperated with the investigation regarding the violation by the government.
  • The individual who furnished information about the violation didn't have knowledge about an investigation into the violation and no administrative action, civil action, or criminal prosecution had commenced in regard to the violation.
  • In these cases, the court may assess a penalty of double the damages sustained by the government by the act of that individual, rather than the standard triple penalty.

Costs of Civil Actions

Civil actions can also come with significant costs. An individual or company who violates laws related to committing fraud or making false claims may be liable to the U.S. government for any costs of the civil legal action being brought to court to recover the damages or penalties for what the government lost due to the actions.

Definitions

In these sections and subsections, it's important to understand what certain terms, phrases, and words mean. For example, the terms “knowingly” and “knowing” mean that an individual, with respect to certain information:

  • Deliberately acts in ignorance of the falsity or truth of the information.
  • Holds actual knowledge of the information.
  • Recklessly disregards the falsity or truth of the information in their actions.

The government requires no proof of the specific intent to act in a way that defrauds its officials.

Another term commonly used in these sections of the U.S. Code is claim, which refers to any demand or request for property or money, whether through a contract or other means. In order to qualify as a claim, the property or money must be:

  • Presented to an agent, employee, or officer of the U.S. government.
  • Made to a grantee, contractor, or other recipient and be used or spent on behalf of the government.
  • The laws are applicable if the government:
  • Has provided or provides any portion of the money or property that is demanded or requested.
  • Will reimburse any recipient for all or a portion of the property or money that is demanded or requested.

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