False Claims Act Changes in the Fraud Enforcement and Recovery Act

Several provisions of the recently enacted Fraud Enforcement and Recovery Act (the FERA) significantly affect the False Claims Act (the FCA). Probably the most significant changes broaden the definition of an FCA claim and eliminate the prior FCA requirement that allegedly false claims for payment shall be presented directly to the government in order to subject a contractor to potential FCA liability. The FERA eliminates this presentation requirement and extends FCA liability to false claims for payment on government-funded projects regardless of whether the claim is actually processed by a government official.

In addition the new definition of an FCA claim now includes any request for money or property regardless of whether the government has title to the money or property. This new and very broad FCA claim definition specifically covers requests for money that are made to a contractor, grantee or other recipient if the money is to be sent to advance a government program or interest as long as the United States provides any portion of the funds .

Other FCA changes enacted through the FERA include a relaxation of the intent element needed to establish FCA liability and a provision that contractor employees may make retaliation claims against employers where they can prove they faced retaliation in connection with bringing an FCA suit.

The intent element has been modified through a new definition of "material" in connection with a false statement made to support an allegedly false claim. The term material is now defined as "having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property."

The intent element has been heavily litigated by the courts, and it remains to be seen what interpretation the courts will apply to future FCA litigation as a result of the new word. The legislative history behind the FERA does, however, indicate that Congress is clearly intended to make it easier for the government to prove FCA liability.

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Source by Christopher Johnson, Esq.


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