Written by: Kyle Mosey
On June 19, 2020, the Department of Justice raised the civil penalties applicable to False Claims Act actions. The civil penalty range prior to the increase was a minimum of $11,181 and a maximum of $22,363 per claim. This range has now increased to a minimum of $11,665 and a maximum of $23,331 per claim.
This updated civil penalty range is the first penalty increase by the Department of Justice since 2018. The penalty increase stems from the 2015 Balanced Budget Act, which requires federal agencies to make inflationary adjustments to civil monetary penalties based on the Bureau of Labor Statistics’ Consumer Price Index.
Once enacted, the new civil penalty range will apply to all False Claims Act civil penalty assessments following the effective date. This will include penalties involving violations that occurred before the effective date but assessed following the increase.
As stated above, the law authorizes a civil penalty between $11,665 and $23,331 per claim, which means that for every violation of the False Claims Act a civil penalty falling within this range will apply. So if a wrongdoer submits hundreds of claims for a type of service that it is not providing, then the violations can add up quickly and lead to millions of dollars in civil penalties.
A whistleblower who initiates a successful False Claims Act lawsuit can be entitled to as much as 30% of the government’s recovery depending on a variety of factors. This increase will hopefully lead to larger recoveries and, in turn, larger whistleblower rewards to those brave enough to come forward.
If you believe you have observed conduct that is potentially violative of the False Claims Act, do not hesitate to contact our experienced team of whistleblower attorneys for a confidential case evaluation.