Frequently Asked Questions

How does the government calculate damages sustained by the act of an individual who has made false claims or committed fraud?

The U.S. government calculates damages sustained by the act of an individual who has made false claims or committed fraud based on the guidelines outlined in the False Claims Act Statute, U.S. Code § 3729. This statute stipulates that anyone found guilty of such acts is liable for a penalty ranging from $5,000 to $10,000, payable to the U.S. Government. This penalty is regulated by the Federal Civil Penalties Adjustment Act of 1990, or 28 U.S.C. 2461, under Public Law 104-401 (1). In addition to this penalty, the government is also entitled to collect three times the damages sustained by the fraudulent act. This triple penalty is a significant deterrent for individuals or companies considering fraudulent activities. However, in certain circumstances, the court may reduce the damages. This reduction is applicable if the individual or company provides information about the violation to U.S. officials within 30 days, fully cooperates with the government's investigation, and had no prior knowledge of an investigation into the violation. In such cases, the court may assess a penalty of double the damages sustained by the government, rather than the standard triple penalty.