Financial Industry Fraud: How the False Claims Act Protects Whistleblowers

financial industry fraud

financial industry fraud Originally signed in 1863 by President Lincoln, the False Claims Act protects whistleblowers from defrauding the federal government. During the Civil War, many suppliers provided poor goods and services to the troops. Lincoln signed the Act into law to target financial industry fraud against the government by government contractors.

The False Claims Act has been revised many times since its original signing, making it even more powerful over the years. However, the Qui tam provision, or whistleblower provision, allows any person or non-governmental entity to file a lawsuit against the company or person committing fraud against the government on the government’s behalf.

Protections for Whistleblowers

The Qui tam provision allows whistleblowers to disclose fraud against the federal government confidentially. It also provides for up to 30% of the proceeds collected to be given to the whistleblower. The rewards for a whistleblower are often substantial, as the fraudster is liable for treble damages on top of a civil penalty.

Who Can Be a Whistleblower

The False Claims Act was written and modified to protect anyone bringing a claim against an individual or company defrauding the government. Even if the conduct is outside of the United States, a whistleblower can bring a lawsuit against the fraudulent company or individual as long as a federal contract, federal procurement, or federal spending is involved. Even non-U.S. citizens and NGOs can be whistleblowers.

Violations of the False Claims Act

The False Claims Act covers several types of claims, including:

  • Presenting a false claim for payment or approval
  • Making a false record or statement
  • Conspiring to violate the False Claims Act
  • Not returning government property
  • Giving false information to the government or giving information to the government without knowing it is wholly true
  • Buying government property from an employee who does not have permission to sell it (buying stolen property)
  • Making a false claim

Schedule a Consultation in Newport News, VA

If you are interested in reporting financial industry fraud, it is vital to consult with our dedicated legal team to ensure you understand your rights. James H. Shoemaker, Jr., Attorney at Law, serves Newport News and the surrounding areas in Virginia. Find out more about whistleblower claims and protections for whistleblowers by speaking with our whistleblower attorney. To schedule a consultation, please call 757-223-4560.

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