COVID-19 fraudsters targeted by private citizens armed with Civil War-era law

A federal law adopted to crack down on contractors who were ripping off the Union Army in the Civil War is now being used to go after COVID-19 pandemic fraudsters.

The False Claims Act empowers private citizens to file lawsuits against individuals and businesses that they believe have defrauded the federal government. To reward plaintiffs, the law requires that they share with the government any money recouped from defendants.

"See something, say something," said Myriam Gilles, a professor at Northwestern University’s Pritzker School of Law in Chicago and an expert on the False Claims Act. "Tell us, but not only that, we’re going to give you a bounty, by giving you a cut of whatever you’re able to recover."

Most of the 1,000 or so False Claims Act cases filed each year originate with a citizen, called a relator, who acts on the federal government’s behalf. The cases are called "qui tam," which in Latin means "who sues for the king as well as himself."

Once the suit has been filed, federal prosecutors have at least two months to decide whether to pursue the matter, move for dismissal or allow the relator to continue the case. Prosecutors take up about 20% of the cases each year, according to U.S. Department of Justice records.

"They weigh a number of factors in deciding whether to intervene, including is the case in the public interest, the strength of the arguments and evidence, and the likelihood of recovery" of the stolen funds, said Rodger D. Citron, associate dean for research and scholarship at Touro University’s Jacob D. Fuchsberg Law Center in Central Islip.

Citron and others said the False Claims Act, also called the Lincoln Act, was passed by Congress in 1863 to address cases of contractors selling the Union Army the same horses twice, trying to pass off crates of sawdust as if they were muskets and filling gunpowder shipments with sand.

More recently, U.S. Supreme Court Justices Clarence Thomas, Brett Kavanaugh and Amy Coney Barrett have questioned whether allowing relators to litigate on the government’s behalf violates the U.S. Constitution.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.