September 03, 2014

False Claim Act - Private Attorney General, 31 U.S.C. § 3730.

by Sven Magnussen

"Congress has let loose a posse of ad hoc deputies to uncover and prosecute frauds against the government. [The US Federal government] may prefer the dignity of being chased only by the regular troops; if so, they must seek relief from Congress." See UNITED STATES EX REL. MILAM V. UNIVERSITY OF TEX. M.D. ANDERSON CANCER CENTER, 961 F.2d 46, 49 (4th Cir. 1992)

The 6th Circuit opined the False Claims Act, 31 U.S.C. § 3730 encourage "whistleblowers to act as private attorneys-general, ... in pursuit of an important public policy." See U.S. TAXPAYERS AGAINST FRAUD v. GEN. ELEC., 41 F.3d 1032, 1041 (6th Cir. 1994)(internal quotes omitted).

Even though whistleblowers sue in the government's name, the whistleblower is not vested with governmental power. The government may intervene and take complete control of the case if it wishes. The False Claims Act is the government's litigation tool for the recovery of losses sustained as the result of fraud against the United States. See S. REP. No. 345, 99th Cong., 2d Sess. 2 (1986), reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 5266. Section 3729 of the Act outlines conduct giving rise to liability under the Act. Such conduct includes knowingly submitting false claims for payment, 31 U.S.C. § 3729(a)(1), and knowingly making or using a false record or statement to get a false claim paid or approved by the government, id. § 3729(a)(2).

"Courts of equity can no more disregard statutory and constitutional requirements and provisions than can courts of law. They are bound by positive provisions of a statute equally with courts of law, and where the transaction or the contract is declared void because not in compliance with express statutory or constitutional provision, a court of equity cannot interpose to give validity to such transaction or contract, or any part thereof." See HEDGES v. DIXON COUNTY, 150 U.S. 182, 192 (1893).

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