FCA/Whistleblower

16. Whistleblower/False Claims Act – Damages and Penalties For Violation of the FCA

If someone steals money from the government, is it enough if they just pay it back?

A system for preventing theft that provides only that the thief must pay the money back, if caught, won’t work. In fact, such a system encourages theft because shrewd person will “create a business model” by stealing everything they can, knowing that if they don’t get caught they get to keep the spoils, and, if they do get caught they only have to payback what they took. So, to stop theft or, for that matter, any wrongdoing, one must provide a penalty to deter future attempts.

In keeping with this need to deter the use of false claims as a means of taking government money, the FCA imposes treble damages; that is, for every dollar wrongfully taken from the United States government, the wrongdoer must pay three dollars back to the government. Additionally, a penalty for each false claim submitted to the government is imposed. This penalty is on a sliding scale tied to inflation and, as of this writing, is $21,563 for each false claim.

As an additional penalty for FCA violations, the government has the right to exclude a contractor from doing future business with the government.