Don’t Forget the States—The Important But Complex Landscape of State-Level FCA Enforcement
When whistleblowers look to file suit for fraud against the government, the oldest and most common tool is the federal False Claims Act (FCA). This statute allows whistleblowers to file suit in the name of the United States and gives the Department of Justice (DOJ) an opportunity to investigate—sometimes for years at a time—while the case remains under seal and before the defendant is aware that the case has been filed. While the federal FCA is a powerful tool in fighting fraud and recovering taxpayer funds, one meaningful limitation is that it only applies to federal funds. The FCA cannot be used to recover funds for state or local government programs, or from private parties.