Whistleblower News & Articles

« Back to Main Blog Page

Related Content

The Federal False Claims Act

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

False Claims Act Penalties: A Complete Guide

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

2019 False Claims Act Penalties

DOJ did not update 2019 False Claims Act penalties, but two other agencies did.  So most 2019 False Claims Act...

2020 False Claims Act Penalties

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.

Statutory Penalties Under the False Claims Act

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?

Penalties Apply For Each False Claims Act Violation

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 Penalty Amounts Adjust for Inflation after June 2020 they run $11,665, to $23,331.

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.

Now, both the date of violation and assessment matter for penalties.False Claims Act Penalties Ranges

Violations Ocurring before November 2, 2015:

  • Before August 1999: $5,000 to $10,000;
  • September 29, 1999 to November 2, 2015: $5,500 to $11,000.

For violations after November 2, 2015 the date of assessment matters:

  • Assessments before August 2016: $5,500 to $11,000.
  • August 2016 to February 3, 2017: $10,781, to 21,563.
  • February 4, 2017 to January 29, 2018: $10,957 and $21,916.
  • January 30, 2018 to June 19, 2020: $11,181 to $22,363.

2020 False Claims Act Penalties – $11,665 to $22,331

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.

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.  In June, 2020 DOJ updated the penalties range to $11,665, to $23,331.

Now On Twitter