False Claims Conspiracy Provision

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False Claims Conspiracy Provision Attorneys

Handling whistleblower cases involving multiple defendants often involves the application of the False Claims Act. Therefore, it is advisable for individuals to consult an experienced whistleblower attorney who can explain the False Claims Act’s conspiracy provision and its potential relevance to their case.

The conspiracy provision, found in 32 U.S.C Section (a)(1)(C) of the False Claims Act, holds individuals accountable if they conspire to commit a violation of any other provision within the Act.

How is the Conspiracy Provision Utilized?

Understanding the False Claims conspiracy provision involves recognizing that it is frequently employed in conjunction with an underlying false claim, which serves as the basis for legal action. Alleging conspiracy can be advantageous for the government because it enables joint and several liability, meaning all conspirators can be held accountable for the entire amount of the false claim.

Alleging conspiracy is a reasonable claim to make when supported by evidence of a conspiracy to defraud the government. Conversely, if there is no evidence of such a conspiracy, attorneys will refrain from making such allegations.

Conspiracy can occur in government contracting and billing for government contracts, as it often involves multiple parties. Subcontractors may engage in fraudulent activities or collude with prime contractors to perpetrate fraud.

Who is Liable for the False Claim?

The law was amended to clarify that parties who cause the submission of a false claim to the government, regardless of whether they personally presented the claim, can still be held liable for that false claim. This means that subcontractors cannot escape liability by providing a false claim to the prime contractor, who may or may not be aware of its falsity, before submitting it to the government.

Subcontractors typically do not directly submit claims to the government; it is the prime contractors who do so. However, under the law, a subcontractor can be held liable for causing the submission of a false claim even without the prime contractor’s knowledge.

Understanding the Role of Subcontracting Claims

Holding subcontractors liable for false claims was historically challenging. It was difficult to establish liability when a subcontractor caused a false claim because the prime contractor, who passed the claim to the government, may have been unaware of any fraud. Proving knowledge of fraud between the two entities was necessary to hold both parties accountable, often leading to the assertion of a conspiracy claim. This was especially difficult under the old requirement of a knowing presentment to the government, which mandated direct submission of the claim.

Defining the Presentment Requirement

The presentment requirement specifies that a false claim must be presented to the government. It is not necessary for the prime contractor to be aware of the claim’s falsity. The crucial factor is that the person who caused the submission of the claim knew it to be false, making them liable.

When examining the False Claims conspiracy provision, it is essential to focus on proving knowledge, which can be challenging in False Claims Act cases. This becomes even more complex in conspiracy cases because demonstrating that individual parties knew they were submitting false claims can already be difficult.

For individual parties, the knowing requirement is a key element in establishing False Claims Act liability. This can involve actual knowledge, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. The law does not require proof of specific intent. However, in a conspiracy case, it is crucial to establish a meeting of the minds between one or more parties to violate the False Claims Act.