Back in the late 1800’s, when the US was in the middle of a civil war and Lincoln was president, a new law was signed into the books. The Federal False Claims Act was drafted in order to cut back on fraud occurring with government contractors. Here’s how it looked. |
The Need for the Law
The government was in a bit of a dilemma. They were funding a war on both sides. As such there were provisions that were needed, horses, ammunition, guns, clothing, and rations. So many supplies were needed that there was little time to check everything that came through.
Some unscrupulous dealers knew this, and they took advantage of it. They would sell a “box of ammunition” and pack it full of nothing but sawdust. Others would sell food supplies, but have everything already rotten and spoiled. Some would sell horses and claim they were in their prime, but in reality the horses were old and ready to die. The government was paying a lot of money for spoiled rations, munitions that were non-existent, and horses that needed replaced almost as soon as they were procured.
Drafting of the Federal False Claims Act
In 1863 President Lincoln signed into effect what was later known as the Lincoln Law. This law gave the government authority to pursue legal action against those defrauding them. But it was a little more than that. It included a Qui Tam clause. This clause said that anyone who blew the whistle on the fraudsters could collect a portion of the settlement.
The qui tam clause was needed in order to encourage people to turn in the fraudsters. Some would do it because it was the right thing to do. But most people would do it because they were getting a monetary reward.
False Claims Act Over the Years
The Act has changed over the years, but it essentially remains the same. The reward was adjusted from a set amount to a percentage of the lawsuit. At one point it was almost gotten rid of entirely; but the government saw a huge decrease in the number of whistle blowings. By giving up a portion of the settlement, the US government saves money in the long run.
Filing a Qui Tam Lawsuit
If you know of fraud occurring, you can blow the whistle. Doing so will save taxpayers a lot of money, and it will save the government a lot of money. Blowing the whistle can also get you a hefty monetary reward as well. Contact a Qui Tam Attorney to learn more.
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