The Origins of the False Claims Act (1863)

From 1863 contractors to today’s hospitals and drug companies, it has always taken brave insiders to expose fraud.

The False Claims Act (FCA) is one of the most important laws in the fight against fraud against the United States government, and its story begins during the American Civil War. In 1863, President Abraham Lincoln signed the original version of the law after widespread reports that suppliers were cheating the Union Army. Contractors were found delivering faulty weapons, using rotten food supplies, and even selling the government mules that were unfit for service. These abuses not only wasted public money but also endangered soldiers’ lives on the battlefield.

To address this, Congress created a legal tool that allowed private citizens to file lawsuits on behalf of the government against those committing fraud. This system is known as “qui tam” (from a Latin phrase meaning “he who sues on behalf of the king as well as for himself”). Under the new law, whistleblowers were given a portion of any financial recovery, creating a strong incentive to come forward with information about wrongdoing.

The law quickly became known as “Lincoln’s Law,” reflecting its wartime origins and the president’s determination to protect public funds. The FCA established a framework where fraud could be pursued aggressively even when government officials lacked the resources or inside knowledge to investigate every suspicious contract.

Although the False Claims Act has been amended several times since 1863, its original purpose remains the same: to protect the public treasury from deceit. The creation of the FCA also set an early precedent for public-private partnership, ensuring that individuals who exposed corruption could play a key role in safeguarding taxpayer dollars.

Today, the FCA continues to serve as a cornerstone of healthcare fraud enforcement, but its roots go back to the urgent need for accountability during America’s bloodiest conflict.