Legal Recourse on Fictious Claims Fictious or fake claims is those claims that are false, as simple as that. These claims are usually fabricated with deceptive intentions and are exaggerated at best. Why are these made? Well, mostly to gain monetary advantages. Naturally, these are illegal, and we will learn more in this article about their penalties, punishments, and legal provisions.
Legal Provisions: Under Section 18 U.S.C. Code Section 287 states on False, Fictitious, or Fraudulent claims, “Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to a fine in the amount provided in this title.”[1]
The False Claims Act (FCA): Enacted in the year 1863, “The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty of $2,000 for each false claim. Since then, the FCA has been amended several times. In 1986, there were significant changes to the FCA, including increasing damages from double damages to treble damages and raising the penalties from $2,000 to a range of $5,000 to $10,000. The FCA has been amended three times since 1986. Over the life of the statute, it has been interpreted on hundreds of occasions by federal courts (which sometimes issue conflicting interpretations of the statute).”[2]
Liability: “The statute begins, in § 3729(a), by explaining the conduct that creates FCA liability. In very general terms, §§ 3729(a)(1)(A) and (B) set forth FCA liability for any person who knowingly submits a false claim to the government or causes another to submit a false claim to the government or knowingly makes a false record or statement to get a false claim paid by the government. Section 3729(a)(1)(G) is known as the reverse false claims section; it provides liability where one acts improperly – not to get money from the government, but to avoid having to pay money to the government. Section 3729(a)(1)(C) creates liability for those who conspire to violate the FCA. Sections 3729(a)(1)(D), (E), and (F) are rarely invoked.”[3]
Penalties: “After listing the seven types of conduct that result in FCA liability, the statute provides that one who is liable must pay a civil penalty of between $5,000 and $10,000 for each false claim (those amounts are adjusted from time to time; the current amounts are $5,500 to $11,000) and treble the number of the government’s damages. Where a person who has violated the FCA reports the violation to the government under certain conditions, the FCA provides that the person shall be liable for not less than double damages.”[4]
Here is the provision from the Bare Act: §3802. False claims and statements; liability
“Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that the person knows or has reason to know—
(A) is false, fictitious, or fraudulent.
(B) includes or is supported by any written statement which asserts a material fact that is false, fictitious, or fraudulent.
(C) includes or is supported by any written statement that—
(i) omits a material fact.
(ii) is false, fictitious, or fraudulent as a result of such omission; and
(iii) is a statement in which the person making, presenting, or submitting such statement must include such material fact; or
(D) is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. Except as provided in paragraph (3) of this subsection, such person shall also be subject to an assessment, instead of damages sustained by the United States because of such claim, of not more than twice the amount of such claim, or the portion of such claim, which is determined under this chapter to violate the preceding sentence.
(2) Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a written statement that—
(A) the person knows or has reason to know—
(i) asserts a material fact that is false, fictitious, or fraudulent; or
(ii)(I) omits a material fact; and
(II) is false, fictitious, or fraudulent as a result of such omission.
(B) in the case of a statement described in clause (ii) of subparagraph (A), is a statement in which the person making, presenting, or submitting such statement must include such material fact; and
(C) contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject to, in addition to any other remedy that may be prescribed by law, a $5,000 for each such statement.
(3) An assessment shall not be made under the second sentence of paragraph (1) concerning a claim if payment by the Government has not been made on such claim.
(b)(1) Except as provided in paragraphs (2) and (3) of this subsection—
(A) a determination under section 3803(a)(2) of this title that there is adequate evidence to believe that a person is liable under subsection (a) of this section; or
(B) a determination under section 3803 of this title that a person is liable under subsection (a) of this section, may provide the authority with grounds for commencing any administrative or contractual action against a such person which is authorized by law and which is in addition to any action against such person under this chapter.
(2) A determination referred to in paragraph (1) of this subsection may be used by the authority, but shall not require such authority, to commence any administrative or contractual action which is authorized by law.
(3) In the case of an administrative or contractual action to suspend or debar any person who is eligible to enter into contracts with the Federal Government, a determination referred to in paragraph (1) of this subsection shall not be considered a conclusive determination of such person’s responsibility under Federal procurement laws and regulations.”[5]
The False Claims Act (FCA), also known as the “Lincoln Law”, is a law enacted at the Federal level. The Act imposes liability on persons and companies (typically federal contractors) who defraud governmental programs.[6] It is the federal government’s primary litigation tool in combating fraud against the government.[7] “The law includes a qui tam provision that allows people who are not affiliated with the government, called “relators” under the law, to file actions on behalf of the government. This is informally called “whistleblowing“, especially when the relator is employed by the organization accused in the suit.”[8] Persons filing actions under the Act stand to receive a portion (15–30%, depending on certain factors) of any recovered damages.[9]
As of 2019, over 71% of all FCA actions were initiated by whistleblowers.[10] Claims under the law have typically involved health care, military, or other government spending programs, and dominate the list of largest pharmaceutical settlements.[11] Between 1987 and 2019, the government recovered more than $62 billion under the False Claims Act.[12]
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[1] 18 U.S. Code § 287 - False, fictitious or fraudulent claims | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu) [2] C-FRAUDS_FCA_Primer.pdf (justice.gov) [3] Ibid. [4] Supra 2. [5] 31 USC Ch. 38: ADMINISTRATIVE REMEDIES FOR FALSE CLAIMS AND STATEMENTS (house.gov) [6] False Claims Act - Wikipedia [7] United States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 267 (5th Cir. 2010) ("The FCA is the Government's primary litigation tool for recovering losses resulting from fraud."). [8] Supra 6. [9] "The False Claims Act: A Primer" (PDF). Department of Justice. February 22, 2011. Archived (PDF) from the original on 2014-11-13. [10] "FRAUD STATISTICS - OVERVIEW". Department of Justice (Civil Division). [11] Supra 6. [12] "Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019". Department of Justice.
