Does the False Claims Act Prohibit Fraudulent Inducement of a Contract?
Fraudulent Inducement of a Contract and False Claims Act Liability
Where a contract is “procured by fraud,” False Claims Act liability flows from fraudulent inducement. Examples of fraudulent inducement include:
the contractor knowingly provides the government with price lists and discounts containing false information in order to induce it to enter into the contract;
the contractor makes an initial misrepresentation about its capability to perform the contract in order to induce the government to enter into the contract; or
a party makes promises at the time of contracting that it intends to break.
Where a defendant causes a contract to be procured by fraud, all claims for payment made under that contract are deemed false for purposes of the False Claims Act, even if the claims do not themselves contain a false statement. U.S. ex rel. Marcus v. Hess, 63 S. Ct. 379, 384 (1943)(holding the initial act of fraud to induce government contract “tainted” every subsequent claim for payment); see also U.S. ex rel. Main v. Oakland City Univ., 426 F.3d 914, 917 (7th Cir. 2005). The core issue is whether the defendant entered into a government contract with the intent not to perform or with the knowledge that it could not perform as promised.” U.S. ex rel. Blaum v. Triad Isotopes, Inc., 104 F. Supp. 3d 901, 914 (N.D. Ill. 2015).
Whistleblower Lawyers Representing False Claims Act Qui Tam Whistleblowers
The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees. To schedule a free consultation, click here or call us at 202-262-8959.
In conjunction with co-counsel, Zuckerman has successfully represented whistleblowers disclosing off-label marketing, Medicare fraud, medical device fraud, and student loan fraud.
Our experience includes:
Representing whistleblowers in NDAA whistleblower retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
Representing whistleblowers disclosing fraud on the government in Congressional investigations.
In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon. Before hiring a lawyer for a high-stakes whistleblower case, assess the lawyer’s reputation, prior experience representing whistleblowers, knowledge of whistleblower laws and prior results. And consider the experience of other whistleblowers working with that attorney. See our client testimonials by clicking here.
U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area.
Dallas Hammer has extensive experience representing whistleblowers at government contractors in retaliation and rewards claims and has written extensively about cybersecurity whistleblowing. He was selected by his peers to be included in The Best Lawyers in America® in the category of employment law in 2021 and 2022.
Described by the National Law Journal as a “leading whistleblower attorney,” founding Principal Jason Zuckerman has established precedent under a wide range of whistleblower protection laws and obtained substantial compensation for his clients and recoveries for the government in whistleblower rewards and whistleblower retaliation cases. He served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protection laws. Zuckerman also served as Senior Legal Advisor to the Special Counsel at the U.S. Office of Special Counsel, the federal agency charged with protecting whistleblowers in the federal government. At OSC, he oversaw investigations of whistleblower claims and obtained corrective action or relief for whistleblowers.
Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Stock developed expertise in financial statement analysis and internal controls testing and fraud recognition. He uses his auditing experience to help whistleblowers investigate and disclose complex financial frauds to the government.
Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” (2020, 2018, 2017, 2015, 2009, and 2007), selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2021) and in SuperLawyers in the category of labor and employment law (2012 and 2015-2021), is rated 10 out of 10 by Avvo, based largely on client reviews, and is rated AV Preeminent® by Martindale-Hubbell based on peer reviews
Zuckerman Law has written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:
