The False Claims Act (FCA) is one of the most powerful tools at the disposal of the U.S. government to combat fraud, waste, and corruption. The FCA penalizes companies and individuals who attempt to defraud the government out of taxpayer money by making false claims or reneging on contracts. This federal law has certain provisions in order to make it as wide-ranging and potent as possible.
One important element of the False Claims Act is that it assesses penalties for each individual false claim made to the government. Therefore, the financial repayment due is not a simple one-time fee as a deterrence against future fraud. Instead, penalties under the FCA take the form of a series of fees due for each individual attempt to defraud taxpayer funds, as well as each violation of the act overall.
There are seven different kinds of violations that the False Claims Act prohibits.
False claims: The most clear-cut kind of violation, false claims are those presented knowingly to the government for payment when the party or person filing the claim is not entitled to the funds that they are requesting.
False records or statements: The making, using, or causing others to use or make false records or statements that are material to a false claim is also prohibited under the FCA. Materiality in this instance means having significant influence over the amount involved.
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A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...