This past month, the False Claims Amendment Act of 1986 celebrated its 35th anniversary. Due to the monumental impact of this law on preventing fraud through private whistleblowers, we at Price Armstrong think that this is good time for a brief review of the history and highlights of the “single most important tool that American taxpayers have to recover funds when false claims are made to the federal government”: the False Claims Act (FCA).
The Inception of the False Claims Act
While it is still employed to this day in cutting-edge fraud cases, the FCA was originally passed by Congress during Abraham Lincoln’s presidency in 1863. Informally known as “Lincoln’s Law,” the FCA was intended “to help the government recover federal funds stolen through fraud by U.S. government contractors.”
In fact, the U.S. Department of Justice (DOJ) notes that the FCA was used during the Civil War “to recover monies from unscrupulous contractors who sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions.”
The Purpose of the False Claims Act
From recovering funds paid to unscrupulous horse sellers during the Civil War to dismembering complex fraudulent Medicare billing schemes today, the purpose of the FCA has remained remarkably consistent over the years. The five core goals of the FCA are to:
- Recover misspent taxpayer money
- Deter future misspending of taxpayer money
- Strengthen companies’ compliance programs
- Provide financial incentives to individuals to blow the whistle
- Protect whistleblowers from retaliation
The Adaptation of the False Claims Act to Modern Times
Despite its somewhat humble 19th century beginnings, the FCA is now one of the DOJ’s most important tools in combatting fraud against the U.S. government. This is due in large part to an October 27, 1986, amendment to the FCA.
The 1986 Amendment allowed for the recovery of treble damages and made it easier for private citizens to bring qui tam actions on behalf of the government. The amendment also increased the whistleblower’s share of the government’s recovery in cases brought under the FCA.
The Impact of the False Claims Amendment Act of 1986
Since its groundbreaking revitalization in 1986, the FCA has helped the U.S. government and private whistleblowers recover over $64 billion, according to the DOJ. In 2020 alone, the FCA led to recoveries of $2.2 billion, with over $1.6 billion deriving from private qui tam lawsuits brought by whistleblowers.
With 672 qui tam lawsuits filed in 2020, the government paid out $309 million to whistleblowers for their help in exposing and combatting fraud against the government.
The Future of the False Claims Act
While the FCA has helped to expose and eliminate wide-ranging schemes to defraud the federal government, the threat of fraud is as prevalent as ever. From health care and defense contracting fraud to cyber-fraud and more, the U.S. government needs the assistance of private whistleblowers to bring to light schemes to defraud.
If you know of potential fraud against the government, you may have a claim as a whistleblower under the FCA. At Price Armstrong, we make it our mission to protect whistleblowers every step of the way and to maximize their recovery. Contact us today for a free initial consultation and review of your case.
