The False Claims Act is a federal whistleblower law. It allows individuals who have information about a company defrauding the federal government to bring lawsuits on behalf of the federal government. Someone who brings a case under the False Claims Act can receive between 15% and 25% of any money the government recovers.
On October 26, 2010, the United States Department of Justice announced that GlaxoSmithKline settled a case under the False Claims Act, and pleaded guilty to criminal allegations that it manufactured and distributed adulterated drugs. As part of the settlement, Glaxo is paying a $150 million criminal fine and a $600 million civil penalty to the government. Cheryl Eckard, the Glaxo employee who brought the False Claims Act case, will receive 16% of the $600 million civil penalty, meaning she is entitled to $96 million.
According to the Department of Justice’s press release, the case against Glaxo is part of the federal government’s efforts to combat health care fraud. The Justice Department further indicates that the United States has recovered “approximately $4.2 billion since January 2009 in cases involving fraud against federal health care programs,” and its “total recoveries in False Claims Act cases since January 2009 have topped $5.4 billion.”
Although the False Claims Act is a federal law, New York, New Jersey, and New York City each have their own False Claims Acts. As a result, employees in New York and New Jersey who are aware of fraud against the government potentially could recover a portion of the money out of which the government has been cheated.
Additional information about the False Claims Act is available on our website.