Transcript FCA* for DUMMIES - The Terry Law Firm

FCA* for BEGINNERS
*NEVADA FALSE CLAIMS ACT
NRS 357.010 et seq.
L. TIMOTHY TERRY
The Terry Law Firm, Ltd.
775.883.2348
BRIEF HISTORY
♦ Added to NRS in 1999; amended 2007
♦ Patterned after Federal False Claims Act
31 U.S.C. §§ 3729 – 3733
Civil War Origins – “Lincoln Law”
♦ Approx 23 States with a FCA : CA, DE, D.C.,
FL,HI, IL, IN, LA, MD, MA, MI, NE, NV,
NH, NJ, NM, NY, OK, RI, TN, TX, VA, WI
“QUI TAM” PROVISION
♦ “Qui tam” – loosely translated means one who
sues for the state as well as for himself
♦ Allows a private individual, not injured by a
defendant’s conduct (and therefore not
an eligible plaintiff under traditional
notions of standing), to sue on behalf of
the government
THE “RELATOR”
♦ The “qui tam” plaintiff is commonly
referred to as the “Relator”
♦ Why become a Relator?
In addition to helping catch the bad
guys and protecting the government
treasury, the Relator also shares in
ultimate recovery ($$$) by the gov’t
FCA LIABILITY
♦ Liability imposed on any person(s) who,
with or without specific intent to defraud,
commit any of the acts listed in NRS 357.040
♦ Primary violations :
(a) knowingly presenting, or causing to
be presented, a false claim for payment
or approval
(b) knowingly making or using, or causing
to be made or used, a false record or statement
to obtain payment or approval of a false claim
FCA LIABILITY Con’t
♦ Primary violations con’t:
(c) conspiring to defraud by obtaining
allowance or payment of a false claim
♦ Statute specifies 5 more activities giving
rise to FCA liability
♦ Liability is joint and several for an act
committed by two or more persons
♦ State, or any political subdivision, can be victim
DEFINITIONS
♦
“Knowingly”
A person acts “knowingly” with respect
to information if (s)he : (a) has
knowledge of the information; (b) acts
in deliberate ignorance of whether the
information is true or false; or (c) acts
in reckless disregard of the truth or
falsity of the information – 357.040(2)
DEFINITIONS Con’t
♦ “Claim” – 357.020
Means a request or demand for money,
property or services made to: (a) an
officer, employee or agent of the state
or political subdivision; or (b) a contractor,
grantee or other recipient of money
from the state or political subdivision
if any part of the money, property or
services requested or demanded was
provided by the state or political subdivision
DEFINITONS Con’t
♦
“Political subdivision” – 357.030
Means a county, city, assessment district
or any other local government as defined
in 354.474
FCA DAMAGES
♦ 357.040(1) :
Defendant liable to gov’t for:
(a) 3 x actual damages
(b) costs of litigation
(c) civil penalty of not less than $5K or
more than $10K for each act
♦ 357.180(1) :
Defendant separately liable for Relator’s
attorney’s fees and litigation costs
LIMITATION ON DAMAGES
♦ Defendant can avoid civil penalties and award of
litigation costs if :
(a) def furnished all info re the fraudulent act to the gov’t
w/in 30 days of becoming aware of info, and
(b) def fully cooperated with any gov’t investigation, and
(c) no crim pros or civ/admin proceeding had been
commenced with respect to fraudulent act at time info
was furnished to gov’t, and
(d) at time info was furnished to gov’t def had no
knowledge of the existence of any investigation re the
fraudulent act
FCA LITIGATION
♦ Relator :
1) files complaint under seal
2) does not serve defendant(s)
3) sends copy of complaint to AGO
(ret rec req) on filing date
4) sends disclosure statement with complaint to AGO
which must substantially cover all material
evidence and info the Relator possesses
5) complaint may be filed in any judicial district in which
the def can be found, resides or transacts business
FCA LITIGATION Con’t
♦ Government/AGO :
1) must investigate complaint’s allegations
2) decide w/in 60 days whether to intervene (for good cause
shown the gov’t may seek extensions of the 60
day deadline)
3) if gov’t intervenes, the complaint must be unsealed and
served on def
4) if gov’t declines intervention, relator takes over litigation of
case (complaint unsealed and served on def)
5) after declining intervention, gov’t may seek to intervene
if relator not adequately protecting gov’t interests
LIMITATIONS re DEFENDANTS
♦ Can’t bring an FCA action :
1) against member of legislature, judiciary or
elected officer of state executive department, or
member of governing body of political subdivision,
if action based upon evidence or info already
known to gov’t
2) if based upon allegations or transactions
that are subject of a civil action or admin
proceeding for a monetary penalty to which
the gov’t is already a party - 357.080(3)
LIMITATIONS re RELATORS
♦ Can’t bring an FCA action :
1) for fraud discovered in gov’t employment,
unless fraud reported to gov’t officials who
fail to act on info for at least 6 months
– 357.090
2) based upon public disclosure of info in:
a) crim, civ or admin hrg; b) legislative
hrg or audit (or political subdivision
audit); c) the news media; UNLESS filed
by AGO or an “original source” of the info
- 357.100 [357.100(2) defines original source]
RELATOR’S RECOVERY
♦ Intervened cases :
- not less than 15%
- not more than 33%
♦ Declined cases :
- not less than 25%
- not more than 50%
♦ Gov’t employee cases (even if relator benefited from
fraud)
- no minimum
- not more than 33% (intervened cases)
- not more than 50% (declined cases)
ADDITIONAL RESOURCES
♦
Civil False Claims and Qui Tam Actions
(3rd Ed) by John T. Boese (Wolters Kluwer – Publishers)
♦ Taxpayers Against Fraud
www.taf.org