Expanding the Use of State False Claims Acts to Combat Fraud

State False Claims Act statutes provide powerful tools for governments to fight fraud across various industries, ensuring that taxpayer dollars are protected. While the federal False Claims Act (FCA) has been instrumental in recovering billions of dollars from fraudulent actors, many states have yet to adopt equally strong statutes to address fraud beyond healthcare programs.

The Need for Stronger State False Claims Acts

While healthcare fraud enforcement has been a top priority for both federal and state governments, fraud extends well beyond the healthcare sector. Per this article from Taxpayers Against Fraud, many state budgets allocate 68% of total spending to non-healthcare programs, including:

• Public infrastructure projects (roads, bridges, and government buildings)
• Education funding and school programs
• Government contracts for goods and services
• Public transportation and environmental programs
• COVID-19 relief funds and emergency assistance programs

Despite the significant taxpayer money spent in these areas, only a handful of states have a robust state False Claims Act that effectively combats fraud across multiple sectors.

Common Types of Fraud That State False Claims Acts Could Address

State False Claims Acts could help recover misused funds in cases of:

• Government Contract Fraud – Contractors inflating costs, delivering substandard materials, or failing to meet contractual obligations.
• Education Fraud – Misuse of public education funds, fraudulent student loan applications, or grant fraud.
• Disaster Relief Fraud – False claims related to emergency assistance and relief programs.
• Environmental Program Fraud – Misrepresentation of compliance with environmental laws to secure government funding.
• Public Works & Infrastructure Fraud – Fraudulent billing, bid-rigging, and substandard work on taxpayer-funded projects.

How States Are Expanding False Claims Act Protections

Some states have recognized the need to strengthen their False Claims Act statutes and have started expanding them to cover fraud beyond healthcare. These states have seen significant financial recoveries by holding corporations and individuals accountable for defrauding government programs.

By enacting broader False Claims Act statutes, states can:

• Enhance whistleblower protections to encourage more reporting of fraud.
• Recover stolen taxpayer funds and reallocate them to essential services.
• Deter fraudulent actors from misusing public funds.
• Support state and local law enforcement efforts to combat financial crimes.

The Role of Whistleblowers in Exposing State-Level Fraud

Whistleblowers play a critical role in uncovering fraud that might otherwise go undetected. Under the False Claims Act, whistleblowers (also known as relators) can file lawsuits on behalf of the government and receive a portion of the recovered funds as a reward. Many of the largest fraud recoveries in history have been the direct result of whistleblower disclosures.

Report Fraud at No Cost

If you have information about fraud involving federal or state programs, you may be eligible for whistleblower protections and financial rewards. 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.