Private companies have been fleecing the federal government since our country’s inception and it continues to be an epidemic today. There’s a law that dates back all the way to 1863, called the False Claims Act, which allows private citizens to sue contractors who have defrauded the Federal Government. Basically, what the civil war era legislators understood was that it would take private citizens to sue these contractors on the government’s behalf in order to fight corruption. The government couldn’t do it alone.
Common Cases of Fraud on the Federal Government
The False Claims Act applies to a fraud on the Federal Government and has applications from A to Z. So, for example, it’s common for medical providers or doctors to over-bill on Medicare or Medicaid, or bill for services that weren’t provided. That’s a fraud on the Federal Government, and a private citizen that has original knowledge of that sort of fraud can bring a False Claims Act on the government’s behalf to collect on the damages that are suffered by the government in that situation.
There has been a rampant problem with private military contractors fleecing the Federal Government for work done in connection with the Iraq and Afghanistan wars. The False Claims Act also has applications in the home mortgage setting. What continues to be a problem as well, are private kickbacks in situations where contractors are providing some sort of compensation to a government decision maker in order to lure or secure Federal Government business contracts. That’s illegal, and a private citizen who knows about that can bring a False Claims Act to recover the damage on the government as a result of that private kickback scheme.