The False Claims Act is the major “whistleblower” law that allows private citizens to report fraud against the government through qui tam cases, and to share in the government’s recovery of money damages. Important amendments to the False Claims Act, took effect on May 20, 2009, when the Fraud Enforcement and Recovery Act of 2009 became law. The “qui tam” statute now includes the following significant additions:
1. The amendments expand the definition of "claim," and fraud directed against government contractors, grantees and other recipients is now plainly covered by the law.
2. Funds administered by the United States government (such as in Iraq) are now protected.
3. Retaining overpayments of money from the government is now an explicit basis of liability, which will be a source of concern for health care providers, among others.
4. Liability for "conspiracy" to violate the Act is broader than before.
5. Protection of whistleblowers and others against "retaliation" now extends not only to "employees," but also to "contractors" and "agents"; and persons other than "employers" potentially may be liable for retaliation.
6. In investigating, the government now has authority to use "Civil Investigative Demands" more broadly, and to share information more with state and local authorities and with whistleblowers/relators.
7. A standard definition of what is "material" now applies in False Claims Act cases.
8. The statute of limitations has been clarified to allow the government to assert its own claims, after the whistleblower (or "relator") has filed a qui tam case under the False Claims Act.
Through these changes, Congress clarified and corrected the False Claims Act by legislatively overruling certain court decisions that sought to limit the scope of the Act, including Allison Engine Co. v. United States ex rel. Sanders, 128 S. Ct. 2123 (2008); United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004), cert. denied, 544 U.S. 1032 (2005); and United States ex rel. DRC, Inc. v. Custer Battles, LLC, 376 F. Supp. 2d 617 (E.D. Va. 2005), rev'd, 562 F.3d 295 (4th Cir. 2009).
The amended False Claims Act is reprinted here, in its entirety.