5 Things Businesses Should Know About The False Claims Act

As a business owner, it is crucial for you to know how laws affect your daily operations. From a financial and moral perspective, knowing these laws will often determine if your business will be a success or come under federal scrutiny. Unfortunately, each year, many business owners find themselves squarely within the cross-hairs of the False Claims Act, a law designed to catch business owners who defraud the government. With that in mind, consider the following:

1. Governments Contracts
As with any contract, you, as a business owner, are required to abide by the terms of any contract you agree to with the government. Because the False Claims Act strictly speaks to contractors who become involved with the government, it’s important for you to understand it. Essentially, you need to educate yourself and your employees regarding the Act itself and what practices it defines, bars and permits.

2. Blowing the Whistle
If your company is found to be in violation of the False Claims Act, it may be sued for its actions. Essentially, the law allows citizens to act on behalf of the government to sue companies that are engaging in fraud against the government. As a reward for doing the right thing, such citizens are offered a portion of the successful judgment, and these portions can be up to 30 percent. It’s important to know that someone like a Goldberg whistleblower attorney will be extremely effective in fighting to convict your business should you move against the False Claims Act. And also, keep in mind that money is a motivating factor in the decisions of many people, meaning you never know when an supposed trusted and loyal employee will turn your company in for illicit dealings with the government.

3. Disclosure
Prior to 2010, cases involving the False Claims Act were struck down if they involved public disclosure arguments, but today, such cases are allowed to proceed. What this means for your business is that you must disclose everything that you offer publicly to the government when the information becomes available. For instance, if you offer a special discount to a certain set of consumers, yet you don’t offer this same discount to the government, you must disclose this information or else your company may be in violation of the law.

4. Overpayments
In addition, your business must also report any overpayments by the government or you may be at risk of violating the False Claims Act. Overpayments might seem like a nice bit of extra money, but if someone reports you for them, you’ll likely be sued. When you are, you’ll not only need to reimburse the government for the overpayments, but you’ll also be penalized for violating the law.

5. Kickbacks
You need to realize that referring customers, vendors, or partners to governmental services that will benefit your business is a violation of the Act. If your company is intentionally directing customers to government programs for the purpose of making more money for your business, this is considered a kickback, and it’s illegal.

One of the best ways to defend yourself and your business from the potential for falling victim to the False Claims Act is to ensure that you and your employees are educated. In addition, you may consider partnering with a False Claims Act attorney to discuss your current business practices and government contracts. Even if you feel that all of your practices are legal, they might not be, and an attorney will be able to give you expert advice and direction to ensure your company’s success for many years to come.

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Saam Banai is a freelance writer and editor and advocate for legal and moral business practices. If you wish to educate yourself on the False Claims Act, or if you know of the illegal actions of a business, contact a Goldberg whistleblower attorney from the firm Goldberg Kohn Ltd. The attorneys at their firm are committed to aiding in the fight against defrauding the government, recovering as large a share of any recovery as possible, and protecting your rights.