False Claims Act Is #5 Top Financial Fraud Law Issue Of 2009

The federal False Claims Act provides that a person or entity may be held liable for knowingly submitting, or causing another to submit, false claims for payment of federal funds. A simple statute, but a complicated law – and one that has grown exponentially in importance over this past year.

Consider that President Obama signed a significant amendment to the FCA earlier this year that expanded the scope of FCA liability, provided for new investigative tools, and made it easier for whistleblowers to bring and maintain FCA suits on behalf of the government. And that the U.S. government obtained nearly $2 billion from lawsuits filed under the False Claims Act’s qui tam provisions in the past fiscal year, running the gamut of federally funded programs, from Medicare and Medicaid to defense and other government procurement contracts, federally insured mortgage and other federal housing programs, disaster assistance loans, agricultural subsidies and more. The trend is only going to continue upward, especially when one recognizes that, at the same time, whistleblowers were awarded $255 million!

It’s also important to recognize that enforcement of the FCA is not limited to domestic fraud – the Department of Justice says that it investigates those who defraud the U.S. “regardless of location” – from the Middle East to anywhere else around the globe.
 
Not to mention, states have their own false claims statutes. Recently, for example, California brought an action against State Street Bank and Trust seeking to recover more than $200 million in allegedly illegal overcharges and penalties; the state’s Attorney General alleged that the bank had committed "unconscionable fraud" against its two largest pension funds – CalPERS and CalSTRS.
 
All of this, and more, makes the False Claims Act the #5 Financial Fraud Law issue of 2009.
 
For background, see http://www.financialfraudlaw.com/content/special-report-%E2%80%9C-president-signs-significant-amendment-federal-false-claims-act%E2%80%9D; http://www.financialfraudlaw.com/lawblog/billion-here-billion-there-and-soon-youre-talking-real-money-2009-false-claims-act-recoverie; http://www.financialfraudlaw.com/content/new-requirements-and-increased-supervision-over-economic-stimulus-and-bailout-funds-may-inc-0; http://www.financialfraudlaw.com/lawblog/broad-reach-fca-feds-sue-kuwait-based-companies-supplied-food-us-troops-middle-east/496; and http://www.financialfraudlaw.com/lawblog/california-sues-state-street-bank-alleged-fraud-against-calpers-and-calstrs/395.