The False Claims Act – Qui Tams

Overview

The False Claims Act was passed in 1863 during the height of the Civil War to curtail abuse of public funds by unscrupulous suppliers of material for the war effort. The Act allows the federal government to recover treble damages plus penalties of $5,500 to $11,000 per violation from any person or entity that knowingly submits false claims for payment to the federal government.

The Act also permits private citizens (called “relators”) to file suit on behalf of the Government and receive a share of the Government’s recovery in return for their efforts. These suits are called “qui tam” actions, which comes from the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which refers to those “who sue on behalf of the king as well as themselves.”

Similar statutes are now also in effect in numerous states and some cities. Since 1986, when the False Claims Act was amended to make filing a “qui tam” action easier, private citizens have collected hundreds of millions of dollars in such suits while simultaneously assisting in the prosecution and deterrence of fraud against the United States.