The federal False Claims Act permits a person with knowledge of fraud against the United States Government, referred to as the “qui tam plaintiff,” to file a lawsuit on behalf of the Government against the person or business that committed the fraud. For example, an employee that learns from a colleague of fraud by his or her employer at work may bring a qui tam action against the employer. If the action is successful, the qui tam plaintiff is rewarded with a percentage of the recovery.
The House and Senate have approved a final version of the Fraud Enforcement and Recovery Act, which includes provisions to strengthen the False Claims Act. President Obama is expected to sign the measure.
The changes to the False Claims Act are due to a perception among some lawmakers that recent federal court decisions may have restrained the law from achieving its intended goals. False claims lawsuits often target hospitals, physicians and pharmaceutical companies because their businesses receive massive sums of federal dollars.
Under the new legislation, the attorney general would be required to submit an annual report to Congress about settlements made under the FCA. This would help to assess whether the Department of Justice is using the act as it is intended and ensure that qui tam plaintiffs are protected in bringing an action.
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