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Defending FCA Actions Related to Pandemic Programs
With the federal government appropriating more than $2 trillion for businesses affected by the COVID-19 pandemic, plaintiffs' lawyers, regulators and politicians have trumpeted the search for whistleblowers — many of whom will try to cash in on perceived fraud in the funding programs created by the CARES Act and other enactments. Indeed, the threat of False Claims Act (FCA) liability is looming large.
The FCA authorizes private individuals (relators) to file lawsuits on behalf of the federal government (qui tam suits), alleging that the defendant fraudulently obtained government funds. These suits threaten the defendant with treble damages and large financial penalties — and are very lucrative for relators, who can receive a sizable bounty of up to 30% of the recovery, and their lawyers, who can obtain attorneys' fees. With so many business suddenly receiving government funds, the relators' bar is eager for the possible FCA suits in the months and years ahead.
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