UPDATED: October 10, 2012
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Fraud against the government takes various forms, including making false statements, making false claims, mail fraud, wire fraud, and conspiracy to defraud the government. These types of fraud may be in connection with federal government contracting, federal and/or federally-funded entitlement programs (such as Medicare, Social Security, public housing programs, agricultural programs etc.), defense procurement fraud, educational programs, and corporate fraud.
Laws pertaining to government fraud are contained in Title 18 of the U.S. Code, Section 1001 (false statements), Section 287 (false claims), Section 371 (conspiracy to defraud the government), Section 1341 (mail fraud), and Sections 1341 and 1343 (wire fraud). Government fraud cases may be prosecuted under these criminal statutes and through civil proceedings under common law rights of action.
Under criminal proceedings, the U.S. Attorneys Office conducts a review and prosecutes criminal law violations. Claims of fraud against the government involving more than $1 million in single damages plus civil penalties would also be handled by the Commercial Litigation Branch of the U.S. Attorneys Office’s Civil Division.
One type of government fraud proceeding is called a qui tam action, a lawsuit brought by a private citizen or “whistle blower” against a person or company who is believed to have violated the law in the performance of a contract with the government or in violation of a government regulation. In a qui tam action, the plaintiff (the person bringing the suit) will be entitled to a percentage of the recovery of the penalty (which may include large amounts for breach of contract) as a reward for exposing the wrongdoing and recovering funds for the government.
Sometimes the federal or state government will intervene and become a party to the suit in order to guarantee success and be part of any negotiations and conduct of the case. This type of action is generally based on significant violations, which involve fraudulent or criminal acts, and not technical violations and/or errors.
The federal False Claims Act makes it easier for private citizens to file qui tam lawsuits. Initially, the FCA was used to fight defense contractor fraud, but it now applies to other areas of government spending, including Medicare and Medicaid.
If you are concerned about government fraud where you work or are under investigation for government fraud, you will need an experienced qui tam attorney on your side.