Under state and federal laws, a “false claim” occurs when any business knowingly presents false or fraudulent claims for payment to the U.S. Federal Government. The business entity can also be held liable if they conspire with others to produce a false claim, or if they knowingly cause a false claim or record to be used.
For most false claim violations, the defendant needs to have acted knowingly in order to be found liable for a false claim violation. That is, accidental false submissions to the government might not immediately result in a violation.
False claim violations can often result in very strict penalties that often involve criminal consequences similar to those for other types of white collar crimes.
The main law governing false claims violations is the federal False Claims Act. This is the law that sets the broad and specific definitions for a false claim violation.
In addition to the federal statute, violations can be found under false claims act laws by state. For instance the California’s False Claims Act also lays out specific guidelines for businesses entities. Thus, a business can potentially be held liable under both federal and state guidelines.
False claim laws basically prohibit the submission of false statements or fraudulent documents to the government. This is not limited to financial records, but may also cover:
- Submission of fraudulent health care statements
- False or duplicate billing for products/services
- Reports that have falsified overall business costs
- Violations involving company “kickbacks” (such as illegal payment for client referrals)
- Violations of the “Stark Law” (dealing with patient referrals for physicians, and other legal matters)
Penalties for False Claims violations usually involve some sort of fine. In some cases, penalties can involve a fine of up to three times worth the amount of the false claim submitted. This is especially true for repeat offenses or offenses that involve complex financial operations worth large amounts of money.
False claim statutes can often be quite complex, and can vary from state to state. You may wish to hire a qualified business lawyer for assistance with any legal issues involving a false claim. Your lawyer can explain your rights under federal and state false claim statutes. Also, if you need to file a lawsuit, or if you need to report an instance of a false claim violation, your attorney can advise you on how to proceed.