issues

False Claims Act: Reporting Fraud against the Government

The False Claims Act is one of the sharpest tools in the government’s arsenal to ensure that public dollars are appropriately spent in the public interest.

Dating back to the Civil War, Abraham Lincoln signed the False Claims Act (FCA) into law to deter fraud against the government. What sort of fraud? In those days, unscrupulous contractors were misusing federal funds by providing dying donkeys instead of warhorses, sand instead of sugar, and guns that couldn’t shoot. In response, Congress empowered whistleblowers–often company insiders on the front lines of detecting misconduct–to bring lawsuits on behalf of the federal government to fight this fraud. 

One hundred and fifty years later, the FCA is one of the sharpest tools in the government’s arsenal to ensure that public dollars are appropriately spent in the public interest. Since 1986, when the statute was revitalized, whistleblowers have helped the government recover over $70 billion lost to fraud. In FY2024 alone, the government recovered a record $2.9 billion… with whistleblower cases accounting for over $2.4 billion of that total!

While FCA reaches broadly insofar as it potentially applies to fraud against the government, certain industries are particularly rife with misconduct. Consider that the federal government spends more than $6.8  trillion a year, including nearly $850 billion on defense; more than $910 billion on Medicare; and, nearly $900 billion on Medicaid. According to estimates from the Government Accountability Office, the federal government could be losing between $233 billion and $521 billion annually to fraud and improper payments.

Misconduct often has a paper trail, often many people are ‘in the know,’ and the numbers can be massive. By way of example, in 2025, a pharmaceutical company agreed to pay $202 million to resolve allegations that it paid kickbacks to physicians to get them to prescribe its medications. In a similar case in 2023, a court ordered a company to pay $486 million for paying kickbacks to the many doctors that used their products in procedures reimbursed by Medicare. In 2024, the government went after a third-party college recruiter for using illegal incentives to encourage study abroad programs and falsify claims for federal aid. Any fraudulent misuse of federal funds–from housing assistance to social welfare programs–is a violation of the False Claims Act.  

Whistleblowers are the key to fighting this fraud. 

In FCA cases, whistleblowers are the government’s greatest asset–and successful whistleblowers are potentially in line for significant rewards. Under the Act, an eligible whistleblower can receive 15% to 30% of the total recovery. The exact percentage depends on several factors, including the assistance provided by the whistleblower; whether the government takes over the lawsuit; and whether the case settles early or goes to trial.

The False Claims Act Whistleblower

As many whistleblowers learn firsthand, fraudsters who are willing to cheat the government are also willing to punish those who speak out and speak up. But employers will do so at their peril. In addition to its substantial monetary awards, the False Claims Act contains significant protections against retaliation.

By statute, employees, contractors, and agents who report misconduct or assist in an FCA investigation or lawsuit cannot be subject to retaliatory conduct such as being fired, demoted, harassed, suspended, or threatened. Remedies for retaliation include reinstatement, double back pay with interest, and compensation for special damages, attorney’s fees, and costs. 

Want to discuss your legal rights as a whistleblower?

Related

Other Issues

See all