False Claims fines may double

Mandatory financial penalties for contractor violations of the False Claims Act may nearly double starting in August under a new law that adjusted the fines for inflation.

Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Public Law 114-74) requiring federal agencies to adjust civil FCA penalties for inflation.

The new levels are to be published by July 1 and to take effect no later than Aug. 1, along with additional annual increases starting in 2017, according to an analysis by Jacqueline Unger, associate with Piliero Mazza PLLC law firm.

The financial penalties were adjusted for inflation most recently in 1999. So far, only the Railroad Retirement Board has declared its new FCA penalty amounts, which are $10,781 at minimum, up to $21,563 per claim. Other agencies are expected to follow.

“The penalties are automatic and mandatory for each false claim submitted to the government,” Unger wrote. Each invoice may result in a penalty. Thousands of invoices could mean millions of dollars in penalties, even if the invoices totaled much less than that.

More Information: Piliero Mazza analysis: http://goo.gl/Bfym7Y

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