Judge Rejects $50.2M Civil Penalty in Qui Tam Case

Weighing the constitutionality of civil penalties under the False Claims Act, a federal judge in Alexandria has refused to impose a minimum $50.2 million fine against an international moving and shipping company for its fraudulent conduct.

The judge, Anthony Trenga of U.S. District Court for the Eastern District of Virginia, called the statutorily required fine “grossly disproportional” to allegations Gosselin Worldwide Moving N.V. bilked the federal government.

In a decision (PDF) published this week, Trenga further said he doesn’t have the power to fashion a penalty other than the one the statute required him to impose. The U.S. Supreme Court and the U.S. Court of Appeals for the Fourth Circuit have not specifically addressed the issue.

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