What Is The History Of The Federal False Claims Act (i.e., Lincoln’s Law or the Informer’s Act)?
The Federal False Claims Act, also called the “Lincoln Act,” or “Lincoln’s Law” or ”Informer’s Act,” or the “Qui Tam statute,” was enacted during the American Civil War in 1863 at President Abraham Lincoln’s request. The law was aimed at stopping dishonest suppliers to the Union military at a time when the war effort made it all but impossible for the government to investigate and prosecute the fraud itself.
During the Civil War, not unlike today, there were greedy and unscrupulous contractors who found it profitable to defraud the government at taxpayer’s expense. The False Claims Act’s purpose was to “root out fraud against the government. . .[a]nd to encourage individuals who are aware of fraud being perpetrated against the government to bring information forward.”
Some historians claim that the False Claims Act came about because of bad mules. During the Civil War, early day defense contractors often sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions among other things.
Congress intended that the False Claims Act would encourage private citizens to file cases in the name of the United States to recover damages when false and fraudulent claims were submitted to the government. As passed in 1863, the False Claims Act permitted a successful whistleblower to collect fifty percent (50%) of the money recovered by the government.
The False Claims Act was amended in 1943 to, among other things, reduce the qui tam plaintiffs or relator’s share of the recovered proceeds from 50% to between 10% and 25%. The 1943 amendment also added a “government knowledge bar” which prevented whistleblowers from filing a qui tam suit if the lawsuit was based on information already known to the government.
In 1986, under the leadership of President Ronald Reagan, Congress acted to strengthen the False Claims Act by amending it as follows to:
- allow increased rewards for successful whistleblowers (i.e., a successful plaintiff now would receive between 15% and 30% of the amount recovered by the government, as well as reasonable expenses and attorneys’ fees).
- to protect whistleblowers from employment related retaliation (a special section provides legal protections and remedies for whistleblowers who are harassed, threatened, discharged or otherwise discriminated against in their employment because of their whistleblowing activities).
- to allow whistleblowers to remain as parties even after the Government joined or intervened in the action
- remove the “government knowledge bar,” which had effectively barred citizens from bringing False Claims Act cases when the government had information about the fraud.
- eliminate the need for a qui tam relator (or the Government) to prove a violator’s specific intent to defraud (e.g., defendants may be liable under the False Claims Act for acts in “deliberate ignorance” or in “reckless disregard” of the truth).
- reduce the applicable standard of proof by restoring the normal “preponderance of the evidence” standard applicable in all other civil cases; and
- increase the penalties for defrauding the government to three (3) times the amount of actual damages plus up to $10,000 per false claim submitted to the government.
The False Claims Act has become the government’s primary tool in the war against fraud on the federal government.
If you have knowledge about a company or companies that committed fraud against the federal government or a federal agency or provided false information to obtain money from the federal government, tell us your false claims act, whistleblower or qui tam story!
–Report A Company That Committed Fraud Against The Federal Government–
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Become A Federal Whistleblower, Report Fraud Committed Against The Federal Government and Recover A Whistleblower Reward For Successfully Bringing A Qui Tam or False Claims Act Lawsuit and Recovering Money On Behalf Of The Federal Government:
–Contact A Federal Whistleblower Lawyer & False Claims Act Attorney–
