Whistleblower News & Articles

« Back to Main Blog Page

Related Content

Customs Fraud

When people and companies bring goods into the United States to sell them, they frequently have to pay a tax...

A Guide To The Federal False Claims Act

The Federal False Claims Act is the U.S. Government’s primary weapon for combatting fraud. It allows whistleblowers to sue persons...

False Claims Act Penalties: A Complete Guide

The False Claims Act requires a penalty for each each violation. The FCA penalty amount also increases with inflation each year....

2019 False Claims Act Penalties

December 30, 2019

DOJ did not update 2019 False Claims Act penalties, but two other agencies did.  So most 2019 False Claims Act penalties will range from $11,181 to $22,363. However, penalties for cases involving the Railroad Retirement Board and The Commerce Department will range from $11,463 to $22,927.

False Claims Act penalties are mandatory for each separate violation of the law.   Moreover, the law requires that the penalty amounts increase for inflation each year. As a result of these two factors, total penalties assessments can run to the millions or tens of millions of dollars.

Whistleblowers and even other lawyers mistakenly think that the False Claims Act limits the penalty amount to $10,000 per violation.  As a result, they often ignore the possibility of penalties when valuing a case.  But this is a mistake.

Penalties are a possibility in every False Claims Act case. Understanding these nuances is key to properly assessing the impact that penalties may play on a case. If you are interested in learning more about False Claims Act penalties, we have a complete guide for you.

Understanding Civil False Claims Act Penalties

The False Claims Act, 31 U.S.C. §§ 3729, provides that anyone who violates the law “is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, . . . plus 3 times the amount of damages.”  But how does that apply in practice?

A Penalty Applies For Each Separate False Claims Act Violation

The False Claims Act imposes a penalty for each violation of the statute. These penalties can add up considerably. Fore example,  in some cases courts have awarded thousands or even tens of thousands of penalties. This can result in tens or even hundreds of millions of dollars in False Claims Act Penalties awards.

The Amounts Adjusts for Inflation – 2019 Penalties are at Least $11,181 to $22,363

The 1986 law set penalties at $5000 to $10,000 per violation.  Later federal law changed these amounts to account for inflation.  In 1999 Congress increased the penalties to $5,500 to $11,000.  In 2015, the inflation adjustment law was amended again and now federal agencies are responsible for updating the penalties annually. Now, both the date of violation and assessment matter for penalties. Since January 30, 2018 DOJ has set penalties at $11,181 to $22,363.

False Claims Act Penalties Ranges

2019 False Claims Act Penalties – $11,181-$22,363 in some cases even more

DOJ did not update the False Claims Act penalties in 2019 apparently because DOJ felt there was no need for further updating.  84 Fed. Reg. 13520.  It did, however, make permanent the increases in 2016, 2017, and 2018.

But, two other agencies did update the FCA penalties, applicable to cases involving their areas of expertise.  Firstly, the Railroad Retirement Board increased the penalties to a range of $11,463 to $22,927.  These would apply only to 2019 False Claims Act cases involving that agency.  Likewise, the Department of Commerce updated the 2019 penalties for Reverse False Claims Act claims.  The Department of Commerce has an interest in customs fraud which are frequently brought as reverse false claims cases.  2019 False Claims Act penalties for those cases were likewise increased to a range of $11,463 to $22,927.

So if your case involves either the Railroad Retirement Board or reverse false claims under the Commerce Department, FCA penalties assessed in 2019 may be at the higher range of $11,463 to $22,927.

Conclusion

Penalties under the False Claims Act can amount to huge portions of a recovery.  When evaluating whether or not to bring a case, understanding False Claims Act penalties calculation is vital.  DOJ did not increase the 2019 False Claims Act penalties. But the Railroad Retirement Board and Commerce department increased them to a range of $11,463 to $22,927.

Now On Twitter