The False Claim Act Protects the Government from Fraudulent Billing and Certifications

Apr 27, 2018

Individuals can file suit on behalf of the government under the Act.

The False Claim Act (FCA) is designed to protect the federal government from fraudulent practices by government contractors. The Attorney General can file suit against contractors who falsify their billings or their certifications.

Matthew DeVries, in an article in BEST PRACTICES CONSTRUCTION LAW, explains that private citizens can also file suit under the Act on behalf of the government.

Jesse Sloan, an employee of Waukegan Steel, LLC, a subcontractor on a federal project, filed suit under a provision in the Act “called a qui tam provision, which permits a private party to bring a civil action alleging fraud against the Government on its own behalf as well as on behalf of the United States … If the private party prevails, he receives a percentage of the recovery.”

This was the case in U.S. ex rel. Jesse Sloan v. Waukegan Steel, LLC., No. 1: 2015cv00458, Document 32 (N.D. Ill.2018) Feb. 28, 2018.

Waukegan was a steel fabricating and installation subcontractor. It was required to submit documentation that its product conformed to AISC, ASTM, and AWS codes that set standards for the steel industry. “The subcontractor was required to submit ‘fabrication quality control and weld inspection certificates’” to the government before payment was issued. According to one of its employees, Waukegan did not have any of these certificates.”

The employee claimed the owner of the company asked him to “fabricate to the inspection certificates.” He refused. The owner then, allegedly, had another employee falsify the required documents.

To prove a FCA fraud allegation “a plaintiff must prove that (1) the defendant made a statement in order to receive money from the government, (2) the statement was false, (3) the defendant knew it was false, and (4) the statement was material to the decision to pay or approve the false claim.”

Sloan met this burden.

Mr. DeVries notes that “the Court in Sloan rejected every defense raised by Waukegan and allowed the case to go forward.”

It appears Sloan’s allegations were legitimate. But the case serves as a reminder to contractors that they should protect themselves from spurious claims by keeping accurate, detailed records for each project.

Source—

In Construction, There’s A Tattletale and There’s What is Right, Matthew DeVries, BEST PRACTICES CONSTRUCTION LAW, March 5, 2018.