Understanding The False Claims Act: What Is Scienter?
The False Claims Act is one of the most powerful whistleblower protection statutes. Under the False Claims Act, a whistleblower with knowledge of fraud against a federal government program can bring a qui tam lawsuit action against the responsible party. If a qui tam lawsuit is successful, the whistleblower is entitled to receive a portion of the funds recouped by the government.
An ordinary breach of contract or good faith mistake does not give rise to liability under the False Claims Act. A whistleblower must establish scienter (intent or knowledge of wrongdoing). Here, our Florida government program fraud attorneys explain the most important things to know about the legal concept of scienter and the False Claims Act.
What is Scienter?
Scienter is a legal term that you may hear in relation to a False Claims Act case. As with much other legal terminology, scienter has its roots in Latin. Broadly speaking, the term means intent or knowledge of wrongdoing. It is a very important element in a False Claims Act case. As a general rule, the statute only imposed liability on parties that knowingly submitted false claims to the government.
What Constitutes “Knowledge” Can Be Complicated in a False Claims Act Case
In order to bring a successful qui tam lawsuit, a whistleblower must establish scienter (knowledge). Though, knowledge is defined relatively broadly in False Claims Act cases. A whistleblower can satisfy this element by proving any of the following three things:
- The defendant had actual knowledge of the false claims;
- The defendant acted in deliberate ignorance; or
- The defendant acted recklessly and should have known about the falsity of the claims.
To be clear, the False Claims Act does not require specific intent. A whistleblower does not need to prove ill-intent on the part of the defendant to establish liability in a False Claims Act lawsuit.
Employers are Responsible for the Conduct of Employees
It is also important to emphasize that employers can be held responsible for the improper conduct of employees. Consider the following scenario: a large federal contractor in Florida enters a multi-million agreement to provide health services to the Department of Veterans Affair (VA). An employee files a qui tam lawsuit against the company alleging false billing records were used to get additional payments from the VA.
The federal contractor cannot escape liability by blaming the matter entirely on a specific executive employee. The federal contractor is legally responsible for its employees. If an executive knowingly submitted false billing records, the company can be held legally liable under the federal False Claims Act.
Speak to Our Whistleblower Protection Attorneys Today
At Guttman, Freidin & Celler, our whistleblower rights lawyers have extensive experience handling Federal False Claims Act cases and Florida False Claims Act cases. We are here to protect your rights and interests. Contact us now for a fully confidential review and evaluation of your claim. From our law office in South Florida, we provide nationwide representation in whistleblower cases.