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In June 2020, DOJ updated the False Claims Act penalties to a range of $11,665 to $23,331. False Claims Act penalties are mandatory for each violation of the law. A single fraudulent scheme can involve thousands of violations. So, 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 penalties to $10,000. Often this leads them to ignore the possibility of penalties when valuing a case. But in 2020, they run much higher.
Penalties are a possibility in every False Claims Act case. But there is a lot of misunderstanding about when and how they apply. Understanding these nuances is key to properly the impact that penalties may play on a case. If you are interested in learning more about False Claims Act penalties, we have a full guide for you.
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?
The False Claims Act imposes a penalty for each violation of the statute. These penalties can add up considerably. 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 1986 law set penalties at $5000 to $10,000 per violation. Later federal law changed these amounts to account for inflation. Now federal agencies are responsible for updating the penalties annually.
Violations Ocurring before November 2, 2015:
For violations after November 2, 2015 the date of assessment matters:
Note that DOJ did not formally update the penalties in 2019. However, on June 19, 2020, DOJ published inflation adjusted False Claims Act penalties for 2020. 85 Fed. Reg. 37004. These accounted for the missed 2019 adjustment. Thus, all penalties awarded after June 20, 2020, for conduct after November 2, 2015 will be from $11,665 to $22,331.
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. In June, 2020 DOJ updated the penalties range to $11,665, to $23,331.