July 11, 2025
By: Roger Handberg
What is the False Claims Act?
Does your business receive state or federal funds? Does it contract with state or federal governmental agencies? If your answer to either of those questions is yes, you should know about the False Claims Act.
The federal False Claims Act was enacted in 1863 out of a concern that the Army was being defrauded by its suppliers during the Civil War. It has been amended several times since then, and Florida passed its own version of the Act in 1994.
The federal and Florida Acts are similar. They authorize their respective governments to investigate suspected violations and to bring civil actions to recover damages and to seek the imposition of penalties. The Acts allow for recoveries when a business or a person has submitted a false claim to the government to get paid or has made a false statement to get a false claim paid. They also apply when a business or person makes a false claim to avoid having to pay money to the government.
To prevail, the government needs to show more than the submission of a false claim or the making of a false statement. Instead, the government must prove that the business had actual knowledge of the falsity, that the business acted in deliberate ignorance of the truth or falsity of the information, or that the business acted in reckless disregard of the truth or falsity of the information.
The penalties for a violation are intended to compensate the government and penalize those who submit false claims. For each false claim, the government can recover treble damages and a penalty of not less than $5,500 and not more than $11,000 (for the federal Act, those penalty amounts are adjusted for inflation). These amounts can quickly add up in a case involving multiple submissions of false claims.
How do the Federal and Florida FCAs differ?
The federal and Florida Acts have a provision that is not common in other statutes. Both Acts authorize a private person to file a civil action on behalf of the government. This is known as a “qui tam” action, a Latin phrase that means “in the name of the king.
When a private person files such a suit, it is often referred to as a “whistleblower” action. The name derives from the fact that the private person cannot base the suit on information that has been publicly disclosed, unless the person bringing the action is an original source of the information. When a whistleblower files a False Claims Act case, they are called a “relator.”
What are the advantages of being a “relator?”
There are financial incentives for relators to come forward and to pursue these suits. Once a relator files a False Claims Act suit, the government has a period of time to review the case, conduct an investigation, and elect whether to handle the case itself. The government’s decision on whether to handle the case affects how much the relator may recover. If the government decides to litigate the case, the relator will receive between 15% to 25% of the recovery. By contrast, if the government elects not to handle the case, the relator is entitled to a larger recovery, of between 25% to 30% of the recovery.
What compensation can “relators” expect to receive for their efforts?
Billions of dollars are recovered every year in False Claims Act cases. For example, in the 2024 fiscal year, the U.S. Department of Justice (DOJ) obtained more than $2.9 billion in False Claims Act recoveries. Of those, $2.4 billion resulted from qui tam actions brought by relators. Those relators received over $400 million as their share of those recoveries.
And those trends show little signs of slowing down. Relators filed the highest False Claims Act cases ever last fiscal year, with 979 federal filings. That is about 18 new cases being filed every week, and many of those cases are filed in Florida.
Where is the highest area in the nation for FCA cases?
In 2021, Lex Machina and LexisNexis released their False Claims Litigation Report, which reported that the Middle District of Florida led the nation in the number of False Claims Act cases being filed between 2016 and 2020. That trend has continued.
From 2022 through 2024, the U.S. Attorney’s Office for the Middle District of Florida secured settlements or entry of judgments of more than $500 million in claims involving government funds that had been lost due to fraud or other misconduct. The Middle District of Florida also participated in a nationwide lawsuit alleging that Walgreens knowingly filed millions of prescriptions that lacked a legitimate medical purpose, which resulted in a $350 million settlement. Significant False Claims Act settlements and judgments also have been obtained by the U.S. Attorney’s Offices in the Northern and Southern Districts of Florida.
Why are Florida FCA cases so high?
One reason for the large volume of False Claims Act cases being filed in Florida is because most False Claims Act cases are filed against healthcare providers. For example, in the 2024 fiscal year, more than 57% of DOJ recoveries involved health care providers. These included cases filed against every type of healthcare provider, including managed care providers, hospitals and other medical facilities, pharmacies, pharmaceutical companies, laboratories, and physicians. As the third-largest state in the country, Floridians are served by a wide variety of medical professionals, many of whom receive payments from Medicare, Medicaid, or Tricare. Those government funds are subject to the False Claims Act.
What impact did COVID have on FCA cases?
Another significant subject of qui tam filings over the past couple of years has been COVID fraud. In response to the pandemic, a number of federal programs were established or funded to assist businesses and people who had been impacted. Those programs included the Paycheck Protection Program and Economic Injury Disaster Loans. Both programs have resulted in False Claims Act recoveries of millions of dollars.
Many more cases are pending, and others are continuing to be filed. One reason is due to the availability of public information about the Paycheck Protection Program loans that were made. The Small Business Administration reports the name of the borrower, location, amount of the loan, amount forgiven, and reported payroll. By comparing that information with other public information, some relators have been able to file multiple suits, seeking recoveries against businesses that they contend were ineligible for the loans.
How are FCA cases prosecuted?
False Claims Act cases are civil cases, but the allegations that support a civil recovery also can support a criminal prosecution under certain circumstances. A claim submitted with knowledge of its falsity can result in a potential investigation and prosecution of federal criminal violations, such as healthcare fraud, mail fraud, wire fraud, false claims, theft of government property, false statements, and money laundering, among others.
The government does not have to choose whether to proceed in a civil or criminal case. It can do both simultaneously. This is called a “parallel proceeding,” and it involves civil attorneys and criminal prosecutors coordinating together, to the extent permitted by law, to pursue the government's criminal, civil, regulatory and administrative remedies.
In conclusion, just as the government will consider the civil and criminal aspects of any fraud allegation involving a government contractor or grant recipient, any business that is facing a False Claims Act suit or investigation should consult with counsel experienced in navigating the complexities that are present in these cases, both from a civil perspective and a criminal one. There are a variety of defenses available to these cases, and a host of matters that need to be considered in deciding how to handle any such case or investigation.
Questions?
Contact Shareholder Roger Handberg or a member of the Litigation practice.