Washington, D.C. October 27, 2016. Today marks the 30th Anniversary of the 1986 amendments to the federal False Claims Act (FCA). Since these amendments were passed, the FCA has proven to be the most effective anti-fraud law in the United States, recovering over $48 billion from those who defrauded the U.S. government.
The FCA, enacted 1863, was modernized in 1986 when Senator Chuck Grassley authored amendments to the qui tam provision of the law. The “Qui tam” provision allows private citizens to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower is eligible to receive up to 30 percent of the monies recovered.
The majority of lawsuits brought under the FCA are filed under the qui tam provision. Since the inclusion of the qui tam provision, the detection and prevention of fraud has risen exponentially. In 1986, prior to the reform, the U.S. government recovered 89 million dollars from detecting and prosecuting fraud. By 2015, that number rose to 48 billion dollars, with whistleblowers responsible for $33.2 billion or 68.7% of that sum. In 2015 alone, qui tam whistleblowers accounted for over 81% of civil fraud recoveries resulting in over $3.5 billion returned to the U.S. government.
In recent years the U.S. Chamber of Commerce has launched an attack to weaken the law under the guise of “fixing” it. In July 2014, Senator Grassley testifying before the House Committee on the Judiciary defended the FCA against the Chamber’s claims that the law was ineffective, stating:
The fact is that no other law in existence has been more effective in battling fraud than the False Claims Act has in the past 25 years. Before the 1986 amendments, it brought in a tiny fraction of what it does today, only about $40 million a year. At that rate, it would have recovered only $1 billion in the past 25 years. Thanks to the 1986 amendments, it’s brought back 42 times that much. Clearly, the False Claims Act is working, and it’s working fantastically.
Another steadfast defender of the FCA is Stephen M. Kohn, a founding partner of Kohn, Kohn & Colapinto and the Executive Director of the National Whistleblower Center, who has represented whistleblowers since 1984. Kohn is committed to guarding the FCA against the continued attacks by the Chamber. Kohn has championed the FCA by testifying before Congress and filing amicus curiae briefs in crucial lawsuits that sought to weaken the law. “The data speaks for itself,” said Kohn. He emphasized, “No other fraud detection law has recovered $48 billion dollars in the same amount of time. Such success proves the False Claims Act fraud recovery program to be the most successful whistleblower protection program in in the world.”
“Without whistleblowers, the United States would not be able to defend itself against the numerous criminals and fraudsters who rip off the government,” Kohn added.
- False Claims Act Works: 25 facts, 25-part blog series by Stephen Kohn.
- Saving America’s “Most Important Tool to Uncover and Punish Fraud,” Report by the National Whistleblower Center, July 30, 2014.
- False Claims Act Hearing a Success