False Claims Act Penalties Get a Big Raise

Mr. Louthian and the Louthian Law Firm provided me with excellent legal services regarding a legal issue with a major corporation.

Errick Bethel Sr.

Mr. Louthian and the Louthian Law Firm provided me with excellent legal services regarding a legal issue with a major corporation.

Errick Bethel Sr.
November 21, 2016

The Department of Justice (DOJ) passed an interim final rule (a rule adopted without public input and put into effect immediately, but with request for comments) on June 30, 2016, that nearly doubles the penalties that wrongdoers are assessed per claim under the False Claims Act (FCA). The new amounts apply to false claims submitted to the government after November 2, 2015.

The old amounts that an entity or person could be penalized formerly ranged from a minimum of $5,500 to a maximum of $11,000 per claim.

The new penalty amounts, which went into effect August 1, 2016, have increased to a minimum of $10,781.40 and a maximum of $21,562.80.

Past Performance: the DOJ and the FCA

In 2015 for the fourth year in a row, the DOJ recovered more than $3.5 billion in judgments and settlements from cases brought under the FCA. Of the over $3.5 billion recovered, $1.9 billion was in the health care area—primarily Medicare and Medicaid—where fraud can take dozens of forms, from kickbacks to shoddy care to plain old overcharging. The next largest recovery amount was $1.1 billion, in the government contracts area. Government contracts cover everything from military weapons and clothing for soldiers to the food served to children under federal lunch programs.

Altogether, the amount recovered by the government for false claims and fraud, from 2009 through 2015, added up to $26.4 billion. We can certainly expect these recovery totals to skyrocket once FCA cases that would be subject to the new, higher penalties work their way through the courts.

What Does the Future Hold?

It’s possible that these greatly-increased penalty amounts might make those who are contemplating submitting false claims think twice. But it’s definitely true that the increased penalties will create bigger recoveries, which will mean larger awards for whistleblowers. The greater the award, the more incentive there is to become a whistleblower.

Successful whistleblowers receive between 15 and 30 percent of a recovery.

You may be wondering, why change the amounts now, and why the odd amounts rather than the former round numbers? The increase came about because of the Federal Civil Penalties Inflation Adjustment Act of 2015, which was enacted in November, 2015. The Act corrected penalties for inflation, using the minimum and maximum penalties that were originally set in 1986.

Blowing the Whistle? We Can Help You with Your Next Step.

If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.

Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning.

The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.

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