Corporate Compliance

U.S. Supreme Court rules on False Claims Act case

Compliance Monitor, June 17, 2008

Last week, the Supreme Court unanimously ruled that the False Claims Act (FCA) is not limited to claims submitted directly to the federal government for payment, but also includes false claims made to contractors employed by the government.

Justice Samuel Alito wrote the Court’s decision which concurred with the 6th Circuit Appeals Court, but differed on its interpretation of the FCA.

The Court of Appeals’ decision said the plaintiff merely had to show the false claim was paid for with government funds. The Supreme Court decided that interpretation was too broad and would extend the law to any organization that receives federal grant money.

The Supreme Court said to be in violation of the FCA the plaintiff must show the conspirators intended the false claim to be “material” in the government’s decision to pay the bill.

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