Insights
Publications

Congressional Action May Open The Door To A New Wave Of Fraud and False Claims Act Litigation

5/18/2009 Articles

Driven by increasing pressure to halt financial fraud and prevent misuse of government stimulus money, as well as continued concern about reported government contractor and Medicare abuses, Congress is revamping the False Claims Act for use as a serious fraud-fighting weapon. 

On May 6, the "Fraud Enforcement and Recovery Act" (FERA) passed the House and it is expected to be signed into law by President Obama soon. 

FERA contains provisions extending the coverage of the FCA to any false or fraudulent claim for government money or property, whether or not the claim is presented to a government official or employee, whether or not the government has title to the money, whether or not a contract exists, whether or not the claimant specifically intended to defraud the government, and -- in the case of reverse false claims -- whether or not any statement about the obligation is submitted to the government at all.  FERA also codifies the lower materiality standard ("natural tendency to influence") recently affirmed by the Supreme Court in the Brouseau case and broadens the definition of a government "claim" to include any request for money "to be spent or used on the Government's behalf or to advance a Government program or interest." 

The net effect of the pending FERA changes is a sweeping increase in the power of the government and private whistleblowers to pursue alleged fraud using the FCA. 

Other pending legislation -- particularly the "False Claims Act Clarification Act of 2009" -- also aims to increase the tools available to investigate and prosecute financial fraud.  These congressional efforts are likely to usher in a new era of increasing fraud and False Claims Act litigation by both the government and private plaintiffs. 

Given the pending changes to the FCA, it is more important than ever that companies receiving government money educate their employees regarding the Act and institute strict internal controls to safeguard against the submission of inaccurate claims or statements to the government.  Combined with regular FCA monitoring, the money and time spent on these internal efforts represent the best way to avoid the much more costly consequences of becoming a FCA target in the government's new war on fraud.

About the Author:  Stephanie Skaff is a partner in the firm's Business Litigation Group and is well-known for her experience litigating high-profile fraud and False Claims Act cases.  Ms. Skaff served as co-lead counsel in connection with a multi-million dollar false claims action involving the construction of the San Francisco International Airport and, prior to that, helped negotiate what continues to be the largest recovery to date under the California False Claims statute -- a $187.5 million settlement of a fraud and false claim action against a large national bank on behalf of a qui tam plaintiff, the State of California and numerous California cities, counties and local government agencies.  Ms. Skaff's current false claim practice focuses on advising companies on FCA compliance and defending against FCA claims brought by the government and/or private plaintiffs.  Ms. Skaff may be reached at [email protected].

Firm Highlights

News

Farella Braun + Martel Ranked Among “Best Law Firms” by U.S. News & World Report and Best Lawyers

SAN FRANCISCO, November 5, 2020: Farella Braun + Martel earned national and regional rankings across a number of practice areas in the U.S. News & World Report and Best Lawyers® release of the “Best...

Read More
Publication

Landlord-Tenant Dispute Resolution

Farella's Real Estate Webinar Series features Tony Schoenberg discussing "Landlord-Tenant Disputes and Challenges." The laws governing landlord-tenant relationships are complicated. Understanding your rights and legal obligations will help you protect yourself, your rental business, and...

Read More
Publication

Testing California’s Price Gouging Statute

Pandemic-related price spikes in consumer goods have attracted the attention of both government enforcers and private plaintiffs. In California, Attorney General Xavier Becerra has issued two admonitions against price gouging – one focused on online...

Read More
News

Farella Braun + Martel Elevates Five to Partner

Read More
News

Eight Farella Braun + Martel Lawyers Listed in Best Lawyers: Ones to Watch 2021

SAN FRANCISCO/ST. HELENA, CA, August 20, 2020: Eight Farella Braun + Martel lawyers were listed in the inaugural Best Lawyers: Ones to Watch . This recognition is awarded to attorneys who are earlier in...

Read More
Publication

7 Ways to Check If Coronavirus Triggers ‘Force Majeure’ Clauses in Your Wine Business Contracts

Never in the experience of most of us has an event so thoroughly interrupted business as usual as the coronavirus pandemic. The wine business runs on contracts: grape purchase agreements, event hosting contracts, vineyard...

Read More
News

Benchmark Litigation 2021 Ranks Farella Among Top Litigation Firms in California

SAN FRANCISCO, October 12, 2020: Farella Braun + Martel continues to be ranked among the top litigation firms in California in the  Benchmark Litigation  2021 guide. Farella was ranked “Highly Recommended” for Dispute Resolution...

Read More
Publication

Jurors, Justice and Technology

Douglas Young, Farella partner and president of the American College of Trial Lawyers, spoke with podcast host Howard Miller about requirements in jury selection and technology for jury and non-jury trials. Listen to the...

Read More
Event

Cannabis IP: Using Intellectual Property to Protect Your Assets and Grow Your Business

Join Nate Garhart and Ashley Roybal-Reid in the discussion on "Cannabis IP: Using Intellectual Property to Protect Your Assets and Grow Your Business." Intellectual property (IP) is a critical issue in the cannabis industry...

Read More
Publication

Cannabis Disputes: How to Minimize Your Litigation Risks

Farella's Cannabis Industry Education Series features Tony Schoenberg and Cynthia Castillo discussing "Cannabis Disputes: How to Minimize Your Litigation Risks." The laws regulating the cannabis industry are quickly changing and evolving. Many disputes are a...

Read More