False Claims Act Also Known as “Lincoln’s Law”

History of the False Claims Act
In 1863 Congress passed a law that created incentives for private individuals to report government fraud in an attempt to curb a rash of fraud against the government. On March 2, 1863 President Lincoln signed the law, called the False Claims Act (“FCA”). Also referred to as the “Informer’s Act” or “Lincoln’s Law,” the original FCA prohibited various acts designed to fraudulently obtain money from the government.

The FCA was initially adopted by Congress with the intention of combating fraud against the United States Army during the Civil War. Although the legislative history of the FCA focused specifically on fraud committed by military contractors, the FCA also applied to fraud committed by all government contractors.

Defendants were subject to both civil and criminal penalties under the original FCA and fined $2000 for each fraudulent claim in addition to a penalty of double the government’s actual damages.

Under the 1863 FCA, private individuals known as “relators” could pursue this remedy through a “qui tam” action, and the informer was entitled to half the total recovery. The justification for allowing qui tam litigation was to encourage citizens to report wrongdoing against the government that would otherwise go unnoticed. In short, the government hoped that economic incentives would promote private enforcement of federal legislation.

Next month we will continue our history lesson with The 1986 Amendments to the FCA.

History of the False Claims Act
Qui Tam Defense Industry Cases
Qui Tam Litigation

Posted in History of FCANo Comments

Leave a Reply

This blog is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this blog also does not result in the formation of a lawyer-client relationship.

Copyright 2014 Berg & Androphy.