What are the penalties under the False Claims Act?
Minneapolis employment law attorney Clayton Halunen discusses penalties of the false claims act.
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The penalties under the False Claims Act are pretty significant. For every violation, there’s between a $5,000.00 to $10,000.00 civil penalty. And when you think about it, if it’s a product, as an example, every single sale – if it’s a pharmaceutical, every sale of that product can constitute a false claim. So if you have millions of false claims, that means that there could be millions of civil penalties of $5,000.00 to $10,000.00. Additionally, the government is entitled to recoup all monies paid that it would not have otherwise paid. And so if, as an example again in the pharmaceutical business, if a drug is being sold for a purpose where it does not have an indication, every sale of that drug for that purpose is a false claim and the government would have a right to recoup that, so that would be part of the damages. With respect to the whistleblower and the reward provision, the whistleblower would be entitled to between 15 and 30 percent of whatever the award is for the portion that’s a civil penalty. Oftentimes in these cases there’s also a criminal penalty that’s attached in dollars, and the relator is not entitled to any portion of that, but they are entitled to 15 to 30 percent of the civil portion.