What is a false claim under the False Claims Act?

False Claims Under False Claims Act

The False Claims Act imposes civil liability on “any person who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim” paid by the Government. 31 U.S.C. § 3729(a)(1)(A) & (B).

The essential elements of an FCA claim are

a false statement or fraudulent course of conduct,
made or carried out with the requisite scienter,
that was material, and
caused the government to pay out money.

The falsity element of a False Claims Act case “asks whether the claim submitted to the government as reimbursable was in fact reimbursable, based on the conditions for payment set by the government.” UnitedStates ex rel. Druding v. Care Alts., 952 F.3d 89, 97 (3d Cir. 2020).

Claims under the False Claims Act may be either factually false or legally false.

A factually false claim misrepresents what goods or services were provided to the Government. Examples include billing the federal government for material and labor that the contractor did not provide, and for projects that were not constructed or submitting reimbursement claims for resident services that were never provided. See, United States ex rel. Citynet, LLC v. Gianato, 962 F.3d 154, 157 (4th Cir. 2020); Affinity Living Grp., LLC v. StarStone Specialty Ins. Co., 959 F.3d 634, 636 (4th Cir. 2020).

A legally false claim falsely certifies that the claiman] has complied with a statute or regulation the compliance with which is a condition for payment.

A relator may show a false certification through either an express certification or an implied certification. The false certification may be express in that the claimant affirmatively represents compliance with a statute or regulation with which it did not comply. Or the certification may be implied in that the claimant seeks payment without disclosing that it violated statutes or regulations.

Whether a false certification is express or implied, it must be “material to the Government’s payment decision” for liability to attach. Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 1996 (2016)). A false certification is material only if (1) “a reasonable man would attach importance to [it]” or (2) “the defendant knew or had reason to know that the recipient of the representation attaches importance to the specific matter ‘in determining his choice of action,’ even though a reasonable person would not.” Escobar, 136 S. Ct. at 2002-03.

The materiality inquiry is holistic in that it considers all of the facts to determine “the effect on the likely or actual behavior of the recipient of the alleged misrepresentation.” Id. at 2002. Proof of materiality includes, but is not limited to:

evidence that the provision is expressly labeled a condition of payment and
evidence that the government consistently refuses to pay claims in cases where the claimant did not comply with the provision.

Contact our False Claims Act Whistleblower Lawyers Today

Call our False Claims Act whistleblower lawyers today for a free consultation at 202-262-8959. We have represented whistleblowers in qui tam actions that have recovered more than $100 million, including student loan fraud, medical device fraud, off-label marketing, and Medicare fraud.

We have worked on significant whistleblower rewards and retaliation cases resulting in substantial recoveries to the government, including cases profiled in Crisis of Conscience: Whistleblowing in an Age of Fraud and Money, Politics, and Corruption in U.S. Higher Education: The Stories of Whistleblowers.

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