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What is the False Claims Act?

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Quick Answer

The False Claims Act gives private citizens the chance to sue individuals who have committed fraud against government programs, explains the Taxpayer Against Fraud Education Fund, or TAF. As of 2015, the Act can provide awards of up to 30 percent of recoveries for those that bring in cases.

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Full Answer

The Act covers fraud that involves any federally funded program or contract, with the exception of tax fraud, explains TAF. There is a separate IRS whistle blower program that covers federal tax fraud. Some frauds uncovered under the False Claims Act include the billing of goods and services never rendered or delivered; charging more than once for the same services or goods; billings for lobbying, marketing or other non-contract related corporate activities; submitting false samples or service records to show better-than-actual performances; presenting untested or broken equipment as being tested and working; or shifting expenses between fixed-price contracts.

The Federal False Claims Act is regarded as one of the most effective tool in combating fraud against the government. The act was enacted during the Civil War to fight fraud against the government by suppliers to the Union Army. The Act is often referred to as Lincoln's Law. During World War II, the Act was ineffective at combating fraud against the government until 1986, when the statute was revamped, explains the Pietragallo, Gordon, Alfano, Bosick and Raspanti law firm.

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