False Claims Act Penalties Increase, Strengthening Whistleblower Incentives
Under the False Claims Act (FCA), defendants found liable in court must pay civil penalties ranging from $5,500 to $11,000 for each false claim submitted to the federal government. A false claim refers to any request for government funds to which the claimant is not legally entitled—whether due to ineligibility, fraudulent misrepresentation, or knowingly failing to return government funds. In addition to penalties, the government can recover triple the amount of actual damages, and whistleblowers who bring successful FCA cases may receive 15% to 30% of the total recovery.
Proposed Increase in False Claims Act Penalties
The U.S. Department of Justice announced plans to raise FCA civil penalties, with the minimum increasing from $5,500 to $10,781 and the maximum rising from $11,000 to $21,563 per false claim. These updated amounts would apply to civil penalties assessed after August 1, 2016, for violations occurring on or after November 2, 2015.
The Department is currently undergoing a formal rulemaking process and has opened a 60-day public comment period, which ends August 29, 2016. After the comment period, the DOJ will finalize the rule and officially adjust the FCA penalty structure.
Impact of Higher FCA Penalties
The increase in False Claims Act penalties is expected to have a major impact on both litigation and settlement strategies. For defendants, higher per-claim fines may raise the cost of litigation and make early settlement more appealing. For whistleblowers, the change enhances the potential financial reward and reinforces the incentive to report government fraud.
Ultimately, these False Claims Act penalties serve as a deterrent to fraud and a powerful tool for recovering taxpayer dollars lost to misconduct. The judge in each case retains discretion to apply either the minimum or a higher penalty per claim, depending on the nature and extent of the fraud.
Report Fraud at No Cost
If you have information about fraudulent practices, contact our office for a free, confidential consultation:
- Fill out our consultation form by clicking here.
- Email us at info@wilbanksgouinlock.com.
- Call (404) 842-1075, ext. 123 or 122.
This article is for informational purposes only and should not be considered legal advice.