As of December 13, 2021, each separate violation of the False Claims Act exposes defendants to a per-claim penalty between $11,803 and $23,607. The increase is part of the Civil Monetary Penalties Adjustment for 2021, a rule issued by the Department of Justice in accordance with the Bipartisan Budget Act of 2015 as part of annual adjustment for inflation. The increase is small – the prior range was $11,665 – $23,331 – but we love an opportunity to talk about FCA penalties. The mandatory penalties of the False Claims Act can act as an important deterrent to wrongful conduct, as well as a mechanism to recover for harm that is often difficult to measure.
Penalties under the False Claims Act
Under the False Claims Act, the government may recover three times its actual losses, referred to as “treble damages.” In addition, a defendant may be liable for penalties for each violation of the act: each false claim submitted or caused to be submitted by the defendant, each false statement made, or each individual violation.
Per-claim penalties were part of the original False Claims Act in 1863, with the amount then set at $2,000. With the 1986 FCA amendments, a range was added, and the per-claim penalties were set at $5,000 – $10,000 per violation.
FCA penalties are mandatory. As set forth in the language of the act, anyone who violates the act “is liable to the United States Government for a civil penalty of not less than $5,000, and not more than $10,000,” which amount is adjusted...
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