Three major corporations: Accenture, Hewlett Packard and Sun Micro Systems, are being charged with violating the Federal False Claims Act. The U.S. DOJ has decided to get involved with the qui tam claim. They are accused of solicting and providing improper payments and other things of value on technology contracts with government agencies.
Click Here to read more from the U.S. DOJ
Corporate America wake up. The fraud penalties in the Federal False Claims Act are the most civilized penalties in the world. The worst thing the government will do in a civil fraud case is give you triple damages and penalties. Yes, it is a lot of money, but if you ever feel the full force of the law against you, you had it coming.
Now, in the real world, the penalties are much stiffer. Take China for example. In a recent Washington Post article, a nice guy named Wang Zhendong figured out that selling his fellow citizens ant farms would be a great idea. Unfortunately he priced his ant farms in a way that the government of China found to be fraudulent.
According to the article the government Mr. Zhendong “is a danger to society…” and “the worst kind of person….” You need to understand that in China some ants are considered rare and useful in making wine or medicines. In Wang’s case he shipped out about $25 worth of ants and charged $1300 for them. In the time Mr. Wang sold the cheap ant farms he racked up about $400 million in sales. According to the article, one of the investors committed suicide over the ant purchase. Somewhat weird, but hey, it is not my culture, so who knows, maybe ant disgrace is the worst kind of disgrace.
Now Mr. Wang’s scheme is mundane by USA standards. Here is the catch. In China Mr. Wang was not fined or told to pay triple damages. He was not forced to pay back the money. He was simply sentenced to death by lethal injection. In China, they put almost everyone to death for up to 60 different types of economic crimes. That is unbelievable. The Washington Post article details that China executes up to 10,000 people a year, which is 80% of all executions worldwide.
So keep your chin up, USA defrauders of the government. Your penalty here will be cheap in a comparative sort of way.
“There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government." Benjamin Franklin
In Qui Tam litigation a private citizen (the whistleblower) who knows of fraud committed against the government may, through his own privately retained lawyers, file a lawsuit to recover the losses caused by the government fraud. The False Claims Act provides huge financial incentives to citizen whistleblowers to retain attorneys and come forward, prosecute these lawsuits and fight government fraud.
Abraham Lincoln, prior to becoming President, was responsible for the creation of the 1863 False Claims Act. This was necessary to protect the government from the fraudulent war equipment suppliers during the Civil War. He stated: "Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation while patriotic blood is crimsoning the plains of the south and their countrymen are moldering in the dust." Although a significant narrowing of the provisions of the False Claims Act took place in 1943, the law was revitalized by Congress in 1986, with a significant expansion of the scope of the law and renewed attention to the federal whistle-blower and his or her attorney as a key to enforcement.
An estimated 10% of the United States annual budget is wasted due to fraud. An experienced Qui Tam Attorney examines any situation in which the government has been cheated to determine whether it is covered under the False Claims Act. The following examples would be covered under the False Claims Act:
· preparing a false record or statement or bill in order to get a false or fraudulent claim paid by the government.
· conspiring with anyone else to have a false or fraudulent claim paid by the government.
· holding property of the government intending to defraud the government or intending to conceal it from the government.
· creating or delivering a false or fraudulent receipt to the government for its property.
· fraudulently buying property of the government from someone who is not authorized to sell that property for the government.
· making a false statement to fraudulently avoid paying a debt to the government or to avoid delivering property to the government.
· causing someone else to submit a false or fraudulent claim.
Congress strengthened the False Claims Act in 1986 to combat fraud committed against the government. Between 1988 and 1995, over a billion dollars was recovered by private Qui Tam lawyers in settlements or verdicts in hundreds of cases (law suits) filed on behalf of the United States government, with whistle blowers who retained their own lawyers to file suit receiving more than $100 million of the recovered funds. Annually, this figure increases almost $1.2 billion was recovered in whistle blower claims and lawsuits filed by private citizens through their own lawyers under the Federal False Claims Act for the fiscal year October 1, 2000 to September 30, 2001. The whistleblowers were awarded more than $210 million for their bravery and willingness to seek justice for the government. In 2005, The Department of Justice estimates, $3.1 billion was collected from businesses defrauding the government.
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