NEW YORK FALSE CLAIMS ACT
The New York False Claims Act rewards a person who blows the whistle on a fraud against the State, a county or a local government. Examples of fraud include:
- Seeking payment for services NOT performed or goods NOT supplied (e.g., contractor who bills Monroe County for work it did NOT do);
- Seeking payment for services performed or goods provided under a contract secured by fraud (e.g., contractor who rigged the bids and secured a construction contract by fraud);
- Falsely certifying compliance with a government contract (e.g., contractor who certifies falsely that they used Grade A concrete); and
- Making a false statement to avoid paying money otherwise owed (e.g., refuse contractor who lies about the amount of garbage it collects for a town and, thus, pays less to that town for being the exclusive refuse contractor).
Those who rip off the government are liable under the New York False Claims Act for: (1) THREE TIMES the amount of the fraud; (2) civil penalties of $6K-$12K per violation (e.g., each false invoice may be considered a separate violation); and (3) attorneys’ fees and costs incurred by the whistle blower.
Until recently, most of the focus under the New York False Claims Act was on fraud in the Medicaid system. Attorney General Eric T. Schneiderman—who as a State Senator in 2010 was the chief architect of legislation to strengthen the New York False Claims Act–formed the Taxpayer Protection Bureau to focus on other frauds, including tax fraud.
FEDERAL FALSE CLAIMS ACT
The federal False Claims Act is very similar to the New York False Claims Act. The federal statute rewards a person who “blows the whistle” on a fraud against the United States government. One example of fraud is a medical care provider who seeks payment from Medicare for services NOT performed on a patient.
Those who rip off the United States government are liable under the federal False Claims Act for: (1) THREE TIMES the amount of the fraud; (2) civil penalties of $5,500-$11K per violation; AND (3) attorneys’ fees and costs incurred by the whistle blower.
In 2012, the United States recovered $4.9 billion under the federal False Claims Act (the highest recovery in a single year). Of this amount, more than $3 billion was recovered in health care fraud cases.
PAYMENT TO A WHISTLE BLOWER
The whistle blower is entitled to collect a percentage (as much as 30%) of the money that the federal or state government recovers from those who planned or initiated the fraud. The following cases are representative of those brought under the New York False Claims Act:
- A $6.2 million settlement was reached with Lantheus Medical Imaging (and its former parent company, Bristol-Myers Squibb) for knowingly failing to pay New York corporate income taxes. The company derived revenue from sales of medical imaging products to hospitals, clinic and other facilities in New York and from training and service activities in connection with its sales.
- A $475,000 settlement was reached with Office Depot for overcharging New York State and local entities by violating price guarantees due to inadequate systems in place to ensure compliance with the promise that it would offer a price at least as low as the price at which it sold office supplies to the United States government.
PROTECTION FOR NEW YORK EMPLOYEES
Employees in New York who blow the whistle are protected from adverse action (e.g., firing, demotion, suspension) by their employers.
An employer who violates this part of the New York False Claims Act is liable to the employee for his lost pay and benefits, a penalty of two times the amount of his back pay (plus interest); and compensation for special damages caused by the violation, including litigation costs and reasonable attorneys’ fees.
GET AN EVALUATION
If you know about a fraud against the federal or state government, please contact us for an evaluation. There is no cost for the evaluation.