The False Claims Act is known as a tool for going after those who take from the government.  But the whistleblower law also allows qui tam actions to help recover when a person does not pay the government what it is due.   These types of False Claims Act cases are called “reverse false claims.”

The False Claims Act has proven to be a powerful tool for recovering money for the federal government lost to fraud.  The success of the whistleblower law is due, in large part, to the ability of private citizens to bring qui tam actions exposing those who drain the government’s resources.  Taking from the federal coffers is not the only way to defraud the government, however.  Holding back, or neglecting to pay amounts due to the government, may also lead to liability.  These “reverse false claims” are just another fraud on the government.

When Congress passed the False Claims Act, it intended to be able to reach any kind of fraud on the government.  With more recent amendments, Congress has made clear that “reverse false claims” will also give rise to liability for any person who “knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.”  Most Americans think of taxes as their only obligation to pay the government.  But, in fact, many corporations and individuals must transmit money to the government in countless other ways too.  For example, a hospital that receives too much in government reimbursement for patient care under the Medicare and Medicaid programs. An importer that misclassifies what it is bringing into the US to reduce how much it owes in customs duty.  Or an oil company that holds back on how much it needs to pay in royalties to the government for drilling on federal lands.

These “reverse false claims” are hard for the government to detect because the federal government does not have the ability to audit every account and see who is holding back on what they owe.  Even when the government does conduct audits, it is often impossible to detect the fraud with books that are kept for the very purpose of avoiding detection.  That is a primary reason that whistleblower laws — and the ability of an insider to bring a qui tam action exposing how these corporations are holding back on what they owe – are critical to the government’s effort to rein in this rampant form of fraud. 

If you believe someone has knowingly failed to pay the federal or state governments amounts that they are due and you would like to learn more about or would like to bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. These whistleblower lawyers understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.