FCA-Related Legislation Winding Its Way Through Congress

Last week, the Senate passed S. 386, the Fraud Enforcement and Recovery Act (“FERA”) of 2009, by a vote of 92-4. FERA was designed to revise portions of the False Claims Act to make recovery of funds easier. The bill specifically targets the misuse of economic stimulus and TARP funds. While the False Claims Act already targeted the submission of fraudulent claims based on a government contract, FERA extended the law to include liability for conspiring to submit “reverse false claims.” An example of a reverse false claim would be the misuse of stimulus or TARP funds awarded by the government, or the knowing retention of an overpayment from the government.

Still pending in the Senate is S. 458, the False Claims Act Clarification Act of 2009, which was previously discussed in a March 9 post. The Hose counterpart to S. 458, H.R. 1788, the False Claims Correction Act of 2009, recently passed the House Judiciary Committee. While the House and Senate bills are quite similar in their aim to allow government employees to file qui tam suits and narrow the public disclosure bar, the House version has some distinctions. For example, the House version seeks to extend the statute of limitations for qui tam actions to eight years, while the Senate version specified 10 years. Additionally, the House bill expands the level of protection from retaliation afforded to whistleblowers, and it significantly weakens the requirement that relators identify specific false claims in filing their complaint.

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