The False Claims Act

History

The FCA was born out of necessity in 1863. During the American Civil War, President Abraham Lincoln was plagued by "unscrupulous profiteers" who defrauded the government by selling faulty and misrepresented goods. To deter such fraud against the government and protect taxpayer funds, Lincoln signed the FCA into law.

The FCA was revolutionary as it recognized that the government couldn't be everywhere at once. Through the "qui tam" provision, private individuals with inside information are permitted to file claims on behalf of the government. These individuals are known as "relators" and may receive a share of the recovery as a reward for alerting the government to the fraud. Relators have become the backbone of modern FCA enforcement.

The Qui Tam Process

Under the FCA's qui tam provision, a relator's case is filed under seal — meaning it stays confidential while the Department of Justice investigates. During this period, the government reviews the evidence and decides whether to intervene and take over prosecution, or allow the relator's counsel to pursue the case independently. If the case succeeds, the relator may receive between 15% and 30% of the amount recovered, depending on the level of government involvement and the value of the relator's contribution.

Whistleblower Protections

The FCA includes anti-retaliation provisions protecting employees, contractors, and agents who report fraud in good faith. Individuals who face retaliation for lawful whistleblowing activity — termination, demotion, harassment, or other adverse action — may be entitled to reinstatement, back pay, and other relief under the statute.

Recent Trends

The FCA has been a key tool used across administrations. Recently, the FCA has been in the spotlight as it is being used more aggressively than ever.

In Fiscal Year 2025, the Department of Justice reported over 1,250 lawsuits were filed and a staggering $6.8 billion in FCA settlements and judgments were recovered—the highest single-year recovery in U.S. history. This is a substantial increase from the year prior, and is a trend that is likely to continue.

The Trump Administration has made it clear that fighting fraud is a top priority, framing it as a broader war on fraud across federal programs. In March 2026, President Trump named Vice President JD Vance to chair a new Task Force to Eliminate Fraud, underscoring how central this effort has become to the administration's agenda. The administration has been keen on pursuing fraud cases involving COVID-19 Relief, Trade & Customs, Healthcare, and Cybersecurity.

For a closer look at PPP fraud, customs fraud, and other categories, visit our Common Types of Fraud page.