Congress Considers Broadening Whistleblower Statute

Bipartisan bills currently in Congress seek to broaden the reach of the federal False Claims Act, the primary means for private citizens to combat fraud against the government. The FCA, also known as the “Lincoln Law” has been in effect since the Civil War. Initially, the Congress passed the law to allow private citizens to act as private attorneys general to combat war profiteering.

After lying dormant for many years, the FCA has returned to popular use. The act was amended in the 1980’s. Since then, the government has recovered more than $20 billion through qui tam actions.

The proposed amendments to the FCA would include the following elements: 1) increase the people who would be liable under the act (currently one must bill the government directly – the amendment would extend liability to those billing private parties that dispense government funds); 2) allow federal employees to bring suits; 3) allow cases to go forward without billing documentation from the defendant; 4) only allow the Department of Justice (and not defendants) to move for dismissal based on public disclosure of information on which the complaint was based; and 5) increase the damages allowed.

The amendment to liberalize the proof of fraud is probably the most controversial of the proposals. Courts require that suits be pleaded with particularity. The issue is whether this means that the plaintiff must have the defendant’s billing documents or whether the proposed amendment will allow the particularity requirement to be met in another manner.

For an in depth look at the issue see the Daily Business Review, “Qui Tam Correction,” page A11, August 18, 2008.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.