July 6, 2023 - The circuit courts of appeal have been split on the intent standard for False Claims Act violations. On June 1, 2023, the Supreme Court in United States ex. rel. Schutte v. Supervalu Inc.(Schutte) resolved the issue, holding that the FCA's scienter element refers to a defendant's knowledge and subjective belief, not what an objectively reasonable person may have known or believed.
The FCA punishes persons and companies — both civilly and criminally — who knowingly submit or cause someone to submit false claims to the government. For example, billing Medicaid or Medicare for services not rendered while knowing they were not rendered is a violation of the FCA.
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Anyone who violates the FCA is civilly liable for three times the government's damages and faces additional penalties per false claim submitted. If one is criminally convicted, imprisonment and additional criminal fines are possible.
While the United States government can pursue those who violate the FCA, private citizens may also do so by filing lawsuits on behalf of the government against those that have committed the fraud. These are called qui tam suits and may result in the Department of Justice taking over the case and/or DOJ's criminal fraud section initiating an investigation into the matter.
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Qui tam suits provide significant motivation for citizens to blow the whistle against alleged wrongdoers because they permit private...
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