The False Claims Act, 31 U.S.C. § 3729 et seq. (“FCA”), originally enacted in 1863 in response to defense contractor fraud during the Civil War, the FCA covers a broad range of actions for fraud and corruption including healthcare fraud and false claims, hospital and emergency room fraud, pharmaceutical fraud, Medicare fraud, defense, and aerospace contractor fraud, energy fraud and false claims, construction and procurement fraud, research fraud, and many others.
The FCA has been amended and strengthened multiple times, is one of the federal government’s most powerful tools for recovering fraudulently obtained federal funds. In addition to allowing the US government to pursue claims on its own, the FCA allows private individuals to file suits on behalf of the government (“qui tam” suits) against those who have defrauded the government. These suits by whistleblowers often represent the majority of false claims suits brought annually.
In the fiscal year ending September 30th, 2021, the Justice Department obtained more than $5.6 billion in settlements and judgments involving fraud and false claims.
Reporting CARES Act Fraud Under the FCA
The Cares Act and PPP cover a wide range of uses of funds, but already stories of large-scale fraud are on the news. Individuals have used fraudulent business entities, financial statements, and fictitious employment records to receive loans they were not entitled to under the law. In some cases, the Cares Act funds were fraudulently obtained through multiple financial intuitions.
In many cases, the legitimate Cares Act and PPP loans weren’t used to support the business or employees but were instead used for personal enrichment, including the purchase of houses, sports cars, and other luxury goods.
CARES Act Violations and the False Claims Act
The FCA has taken on renewed importance as the federal government has distributed more than $2 trillion under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Paycheck Protection Program (“PPP”).
If you are aware of someone obtaining or using Cares Act or PPP loan proceeds fraudulently, you can report them with us.