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False Claims Act

Taxpayers shouldn’t have to worry about their tax dollars being stolen by unscrupulous fraudsters. But many white collar criminals look at government money as an opportunity for them to make false claims for payment or commit government contract fraud. Fortunately, the United States False Claims Act, a form of a qui tam action, exists to protect taxpayers and hold fraudsters accountable. The False Claims Act allows individuals to sue bad actors on behalf of the Federal government. In exchange for whistleblowers doing the right thing and turning over the people and corporations who are stealing money, the government allows the whistleblowers an opportunity to recover a portion of the money.

The False Claims Act has an interesting history in the United States of America. The law authorizing these claims was originally passed during the Civil War in order to stop profiteers from defrauding the Union Army through supply contracts. The law has been modified and changed over the years to its present form. The False Claims Act has been used to combat mortgage industry fraud, healthcare fraud, and defense contract fraud.

After the Great Recession, the law was used to go after the people who had defrauded Fannie Mae and Freddie Mac. Because false certifications were made to these organizations, which have a government funding guarantee behind them, and because these organizations ended up having to make payouts because of these false certifications, the False Claims Act was able to be used to recover some of the false claims for payment.

False Claims Act cases are only possible when Federal money is taken that shouldn’t be. Oftentimes, these cases involve Medicaid fraud, Medicare Fraud, Tricare Fraud, Defense Department Fraud, military logistics fraud, or some other kind of fraud. Because of the coronavirus pandemic, there’s also an opportunity to report Payroll Protection Program fraud, otherwise known as PPP fraud, and other CARES Act fraud. These qui tam actions involve more than just filing a report. Trying to pursue an action under the False Claims Act requires actually filing a lawsuit in Federal District Court. When you are ready to bring a False Claims Act lawsuit, find a lawyer who is experienced in filings these kinds of qui tam cases. If you need to bring a False Claims Act case in South Carolina, look for a lawyer who is ready to bring an action in the District of South Carolina Federal District Court. Saluda Law, LLC handles these qui tam actions.

Because Federal money is involved and because there’s usually a specific Federal agency involved when false claims for payment have been made, don’t be surprised to be working with various agents for the Office of the Inspector General (OIG) from various agencies. For Medicare and Medicaid claims, you should expect to work with the United States Department of Health and Humans Services Office of the Inspector General (USDHHS OIG). For Defense Department Fraud, don’t be surprised to be working with the Naval Criminal Investigative Service (NCIS), the Army Criminal Investigation Command (USACIDC), the Air Force Office of Special Investigations (USAFOSI or AFOSI), and the Department of Defense Office of Inspector General (DOD OIG). If you are dealing with mortgage fraud, don’t be surprised to be working with folks from the United States Department of Housing and Urban Development Office of the Inspector General (HUD OIG). Additionally, there is a chance that agents from the Federal Bureau of Investigation (FBI) will also be working on a False Claims Act case.

False Claims Act cases are filed under seal when they are originally filed. The lawsuit is served on the Federal Government who is then given an opportunity to intervene in the lawsuit. Specifically, the lawsuit is served on the Department of Justice. The lawsuit is served on the Attorney General of the United States, the local U.S. Attorney’s Office, and the Civil Frauds Division of the Department of Justice. Upon service, the Department of Justice makes a determination as to who will be responsible for reviewing the lawsuit and determining if the Federal Government wishes to intervene. The Federal Government can seek an extension to continue the seal or the government can make a determination that they do not want to intervene and that the seal does not need to be extended. While the Government is making their determination of whether or not to pursue the case, they may issue what is known as a Civil Investigative Demand. These Demands, which are like subpoenas, allow the Government the opportunity to demand certain information from the accused fraudster. Sometimes, after a False Claims Act lawsuit is filed, the Department of Justice of the local U.S. Attorney’s Office will make a determination that criminal conduct may have occurred. Oftentimes, both a criminal Assistant United States Attorney (AUSA) and a civil AUSA will be working on the facts alleged in the complaint in order to determine what the response of the Federal government should be.

If the government chooses not the intervene, the Relator must make a determination if they want to proceed on their own or if they want to try to drop the lawsuit. Having an experienced Attorney can help the Relator decide if a case is worth bringing in the first place and also decide if the case is worth pursuing if the government is not going to intervene. Oftentimes, not only the merits of the case must be considered, but also the cost of litigation and the timeline of litigation. False Claims Act cases can be expected to take years to resolve.

If the government chooses not to intervene and the relator pursues the case and the Courts unseal the Complaint, the Summons and Complaint need to be served on the Defendant. The Defendant in the case will often try to get the case dismissed by making a Motion for Summary Judgment. It’s important that your lawyer know how to file a Complaint that establishes sufficient information in the Complaint such that the Complaint survives the Motion.

If you are looking to blow the whistle on fraud against the Federal government in South Carolina, call or contact Saluda Law, LLC today. Saluda Law is located in Lexington, South Carolina. See if you can assist the government in stopping false payment claims and get rewarded for doing so.

This post has been reviewed and approved by Judah VanSyckel

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