What’s a “False” Claim?

State and federal false claims acts outlaw “false” or “fraudulent” claims against the government.

But what’s “false” or “fraudulent”?

In the context of false claims laws, “false” and “fraudulent” are specialized terms of art. Generally speaking, courts have interpreted these terms broadly, to cover conduct that might not ordinarily be thought of as either “false” or fraudulent,” recognizing that scams and schemes against the government take many multifarious forms.

At the same time, however, not everything that amounts to cheating the government is covered. The courts have drawn lines. In particular, negligence and mismanagement, waste, and “mere” contractual or regulatory violations are often beyond the reach of False Claims laws and not made illegal by them.

Generally speaking, all of the following misconduct provides the basis for whistleblower claims under either the federal False Claims Act or analogous state statutes:

  • Billing for goods or services never delivered or rendered
  • Paying bribes or kickbacks to obtain government funding or contracts
  • Deliberate overcharging
  • Double billing
  • Knowingly claiming unallowable expenses
  • Fraudulently inflating charges or expenses
  • Bid rigging or collusion to frustrate competitive bidding
  • Providing defective products and services
  • Knowingly failing to comply with contract specifications
  • Falsely certifying compliance with contract requirements or state or federal law
  • Charging time or materials used for one project to another (“cross charging”)
  • Making false statements to obtain, or to keep, a contract or grant
  • Inflating overhead costs or other expenses
  • Substituting inferior parts
  • Misrepresenting eligibility for Minority, Women or Disadvantaged Business Enterprise programs or set asides
  • Failing to credit the government for rebates received from subcontractors
  • Billing for “ghost” patrollers
  • Wrongfully retaining overpayments
  • Falsifying, forging or altering bills, or statements or records used to support or obtain payment or increase reimbursements or payments
  • Withholding royalty payments owed to the government
  • Knowingly using the wrong billing codes to increase reimbursements or payments
  • “Bundling” or “unbundling” charges to increase reimbursements or payments
  • Filing claims for phantom victims or fictitious damages or injuries