Posts Tagged ‘Penalties’

False Claims Act penalties are going up and Vermont is looking back

Whistleblower Award

Whistleblower AwardEarlier this month the Railroad Retirement Board announced in the May 2nd Federal Register that the statutory penalties associated with False Claims Act cases would be going way up.  The underlying legislation spurring the increase is the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

Pursuant to the Act, the new, post-adjustment minimum penalty for a False Claims Act violation is $10,781.40, which is the result of multiplying the current minimum penalty of $5,000 by 2.15628 and the new, post-adjustment maximum penalty is $21,562.80, which is the result of multiplying the current maximum penalty of $10,000 by the same 2.15628.

These large increases will be adjusted annually in January so each year, the cost of violating the False Claims Act could go up. The initial increases become effective for claims that are made on or after August 1, 2016.

VermontUnfortunately, the increases aren’t retroactive. However, on that topic, the Vermont False Claims Act just became retroactive via legislative inaction. Vermont’s False Claims Act was put into effect a little more than a year ago and it included a provision that it would not be retroactive until March 15, 2016, at which point the statute would be deemed to have retroactive application absent a legislative amendment to the contrary.

Well, no legislative action was undertaken so now the Vermont False Claims Act found at 32 V.S.A. § 639 can look back to cover false claims during applicable limitations provisions under Vermont law.

Both of these developments are good news for taxpayers who can now protect a greater taxpayer demographic and potentially recover much larger penalties from entities that are being paid by the government as a result of false claims.

Feel free to contact us if you have any questions.

 

Whistleblowers Make a Difference, Study Finds

Whistleblower Case StudyA study released last week by the Social Science Research Network proves what False Claims Act attorneys have known all along: whistleblowers matter.

Four researchers evaluated penalties for misrepresentation from the Department of Justice and the Securities & Exchange Commission from 1978 to 2012.  The researchers controlled several factors and then compared cases that involved whistleblowers and those that did not. Read More…

 

Will the Supreme Court slash False Claims Act penalties?

Gosselin Worldwide MovingOne case we’ll be watching next term is whether the Supreme Court takes the appeal of Gosselin World Wide Moving, N.V. v. U.S. ex rel Bunk.

The complicated fact pattern laid out in the Fourth Circuit’s opinion tells the tale of the defendant moving company colluding with its industry peers to artificially inflate the packing and loading component of bids submitted to the government. For its actions, the moving company was convicted of federal criminal offenses in the Eastern District of Virginia. See United States v. Gosselin World Wide Moving, N.V., 411 F.3d 502 (4th Cir. 2005).

The Fourth Circuit’s opinion ends with a final judgment of $24 million in False Claims Act (FCA) penalties even though the actual damages inflicted on the government were much less than that amount. This is because once liability is established, the FCA permits treble damages plus a civil penalty of $5,000 to $11,000 for each false claim submitted. In the Gosselin case, the penalties added up quickly because the Fourth Circuit ruled that the FCA allows for a separate penalty for each of the more than 9,000 false invoices the moving company submitted to the government.

The American Hospital Association, United States Chamber of Commerce, and the Pharmaceutical Research and Manufacturers of America joined forces to submit an amici curiae brief (amici curiae is a legal term meaning that the organizations are offering the court information although they are not parties in the case) to encourage the Supreme Court to hear the case in order to limit the moving company’s exposure under the FCA.

The organizations that joined in the amici curiae brief are made up of businesses that would greatly benefit from decreased FCA exposure so their interest in the case is readily apparent. Conversely, the case is equally important to whistleblowers who could see their case’s value severely diminished by an adverse Supreme Court decision.

We at James Hoyer hope that the Supreme Court agrees with the Fourth Circuit that the dollar amount “appropriately reflects the gravity of Gosselin’s offenses and provides the necessary and appropriate deterrent effect going forward.” We’ll let you know what happens.

If you have any questions about this case or any other whistleblower matter, please contact us.