False Claims Act

The False Claims Act is an American federal law which imposes liability on people or corporations who defraud government programs. It is the primary means by which the federal government is able to combat fraud against the government. Included in the False Claims Act is a qui tam provision that allows individuals who are not affiliated with the government to file suit on behalf of the government. These people are known as whistleblowers.

The False Claims Act is also known as the Lincoln Law; as widespread fraud was rampant during the Civil War. Inferior goods and services were sold to the government, and this is the origin of the term "shoddy," as many Union uniforms were made of inferior wool and quickly fell apart. In 1863, Congress passed the first False Claims Act, which offered a reward under the qui tam provision.

The False Claims Act established liability whenever a person or other entity presents a false claim, a false statement, knowingly purchasing government property from an unauthorized officer, among other provisions. Changes were made to the False Claims Act in both 1986 and 2009. The 2009 changes were the most significant changes in the law's history, and now prohibits a person from knowingly submitting a payment or reimbursement claim known to be fraudulent, making a false statement to a fraudulent claim, engaging in conspiracy to defraud the government, and concealing an obligation to pay money to the government.