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Everyday honest taxpayers lose money because of rampant fraud against their own government. Recent examples include fraudulent billing by government contractors, fraudulent billing for medical services that are never provided, and numerous false claim schemes involving prescriptions and procedures under both Medicare and Medicaid, as well as state-based health care programs. These schemes may be simple or elaborate, but all are kept hidden from the public. This is the very reason why our country, since the time of President Abraham Lincoln, has encouraged individuals to report fraud against the government, and, upon the successful prosecution of wrongdoers, rewards those with the courage and integrity to take a stand.
President Lincoln enacted the False Claims Act (“FCA”) during the American Civil War in 1863. During the Civil War many unscrupulous contractors would sell the Union Army decrepit horses, faulty rifles and spoiled rations. At President Lincoln’s request, the False Claims Act was enacted into law and was specifically directed at an effort to “root out fraud against the government. . .[a]nd to encourage individuals who are aware of fraud being perpetrated against the government to bring information forward.” The reward was offered as a “qui tam” provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery.
Over 100 years later, Congress strengthened The False Claims Act, which was amended in 1986. In that amendment, Congress increased the damages and penalties that can be recovered in such actions, and added protection against retaliation for “whistleblowers”. The purpose of the bill was to encourage individuals to “blow the whistle” on fraud against the government. Congress did so by increasing the penalties that could be imposed against wrongdoers to a minimum of $5,000.00 and a maximum of $10,000.00 for each false claim for payment, plus three times the government’s actual damages. Additionally, the whistleblower, known in the FCA as a “relator”, could obtain a recovery of between fifteen (15%) and thirty (30%) percent of the amount recovered plus reasonable expenses and attorney’s fees.
Recently, Congress has enacted another law to fight corporate corruption, the Dodd-Frank Act. Under Dodd-Frank, the Securities & Exchange Commission (“SEC”) has established a $450 million bounty program, which rewards whistleblowers for information related to a possible securities violation. Should the SEC recover a fine of $1 Million or more, the whistleblower will receive between 10% and 30% of the amount recovered. These cases may range from fraudulent accounting to insider trading to Ponzi schemes.
In difficult times, like today, where there is an ever-increasing concern over federal and state budgets and a slower-than-usual economy, it is imperative for the government and private citizens alike to stand up to those who seek to defraud honest taxpayers and our federal and state programs. For too long, unprincipled parties have raided our government’s coffers; resulting in higher tax burdens, skyrocketing health care premiums and endless insurance expenses.
If you have personal knowledge of a fraudulent scheme or have been personally defrauded, we would like to hear your story.
“Call us if you have a personal story about Fraud on Taxpayers or False Claims for Payment made by Corportations at 1-866-389-FIRE (3473)or contact us by email at firstname.lastname@example.org if you have evidence of fraud that robbed taxpayer dollars. If our government is paying too much due to fraud by a corporation, Ring of Fire wants to do a story on it.”