31 U.S.C. § 3729 — False claims

Page 335 TITLE 31—MONEY AND FINANCE § 3729 1 So in original. Probably should be ‘‘101–410’’. costs of bringing a civil action for the debt if the plaintiff denies the debt or does not agree to the setoff; and (B) have a civil action brought if one has not already been brought. (c) If the Government loses a civil action to recover a debt or recovers less than the amount the Secretary withholds under this section, the Secretary shall pay the plaintiff the balance and interest of 6 percent for the time the money is withheld. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 977; Pub. L. 104–316, title II, § 202(p), Oct. 19, 1996, 110 Stat. 3844.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3728(a) ..... 31:227(1st sentence words before semicolon). Mar. 3, 1875, ch. 149, 18 Stat. 481; restated Mar. 3, 1933, ch. 212, § 13, 47 Stat. 1516. 3728(b) ..... 31:227(1st sentence words after semi- colon, 2d, 3d sen- tences). 3728(c) ..... 31:227(last sen- tence). In the section, the words ‘‘of the United States’’ are omitted as unnecessary. In subsection (a), the words ‘‘final . . . recovered . . . duly allowed by legal authority’’, ‘‘for payment’’, and ‘‘in any manner, whether as principal or surety’’ are omitted as surplus. In subsection (b)(1), the words ‘‘due from the plaintiff to the United States’’ are omitted as surplus. In subsection (b)(2)(A), the words ‘‘of such judgment’’, ‘‘be sufficient to’’, and ‘‘charges and’’ are omitted as surplus. The words ‘‘of bringing a civil action’’ are sub- stituted for ‘‘in prosecuting the debt’’ for consistency in the revised title and with other titles of the United States Code. The words ‘‘of the United States to final judgment’’ and ‘‘to the United States’’ are omitted as surplus. Subsection (b)(2)(B) is substituted for 31:227(3d sen- tence) for consistency and to eliminate unnecessary words. In subsection (c), the words ‘‘for debt and costs’’, ‘‘thereon’’, and ‘‘from the plaintiff’’ are omitted as sur- plus. Editorial Notes AMENDMENTS 1996—Subsec. (a). Pub. L. 104–316, § 202(p)(1), (2), sub- stituted ‘‘Secretary of the Treasury’’ for ‘‘Comptroller General’’ before ‘‘shall withhold’’ and ‘‘Secretary’’ for ‘‘Comptroller General’’ after ‘‘presented to the’’. Subsecs. (b), (c). Pub. L. 104–316, § 202(p)(2), sub- stituted ‘‘Secretary’’ for ‘‘Comptroller General’’ wher- ever appearing. § 3729. False claims (a) LIABILITY FOR CERTAIN ACTS.— (1) IN GENERAL.—Subject to paragraph (2), any person who— (A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; (C) conspires to commit a violation of sub- paragraph (A), (B), (D), (E), (F), or (G); (D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property; (E) is authorized to make or deliver a doc- ument certifying receipt of property used, or to be used, by the Government and, intend- ing to defraud the Government, makes or de- livers the receipt without completely know- ing that the information on the receipt is true; (F) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Govern- ment, or a member of the Armed Forces, who lawfully may not sell or pledge prop- erty; or (G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and im- properly avoids or decreases an obligation to pay or transmit money or property to the Government, is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104–410 1), plus 3 times the amount of damages which the Government sustains because of the act of that person. (2) REDUCED DAMAGES.—If the court finds that— (A) the person committing the violation of this subsection furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information; (B) such person fully cooperated with any Government investigation of such violation; and (C) at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had com- menced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investiga- tion into such violation, the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of that person. (3) COSTS OF CIVIL ACTIONS.—A person vio- lating this subsection shall also be liable to the United States Government for the costs of a civil action brought to recover any such pen- alty or damages. (b) DEFINITIONS.—For purposes of this sec- tion— (1) the terms ‘‘knowing’’ and ‘‘knowingly’’— (A) mean that a person, with respect to in- formation— (i) has actual knowledge of the informa- tion; (ii) acts in deliberate ignorance of the truth or falsity of the information; or Page 336 TITLE 31—MONEY AND FINANCE § 3729 (iii) acts in reckless disregard of the truth or falsity of the information; and (B) require no proof of specific intent to defraud; (2) the term ‘‘claim’’— (A) means any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that— (i) is presented to an officer, employee, or agent of the United States; or (ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government pro- gram or interest, and if the United States Government— (I) provides or has provided any por- tion of the money or property requested or demanded; or (II) will reimburse such contractor, grantee, or other recipient for any por- tion of the money or property which is requested or demanded; and (B) does not include requests or demands for money or property that the Government has paid to an individual as compensation for Federal employment or as an income subsidy with no restrictions on that individ- ual’s use of the money or property; (3) the term ‘‘obligation’’ means an estab- lished duty, whether or not fixed, arising from an express or implied contractual, grantor- grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment; and (4) the term ‘‘material’’ means having a nat- ural tendency to influence, or be capable of in- fluencing, the payment or receipt of money or property. (c) EXEMPTION FROM DISCLOSURE.—Any infor- mation furnished pursuant to subsection (a)(2) shall be exempt from disclosure under section 552 of title 5. (d) EXCLUSION.—This section does not apply to claims, records, or statements made under the Internal Revenue Code of 1986. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 978; Pub. L. 99–562, § 2, Oct. 27, 1986, 100 Stat. 3153; Pub. L. 103–272, § 4(f)(1)(O), July 5, 1994, 108 Stat. 1362; Pub. L. 111–21, § 4(a), May 20, 2009, 123 Stat. 1621.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3729 ......... 31:231. R.S. § 3490. In the section, before clause (1), the words ‘‘a member of an armed force of the United States’’ are substituted for ‘‘in the military or naval forces of the United States, or in the militia called into or actually em- ployed in the service of the United States’’ and ‘‘mili- tary or naval service’’ for consistency with title 10. The words ‘‘is liable’’ are substituted for ‘‘shall forfeit and pay’’ for consistency. The words ‘‘civil action’’ are sub- stituted for ‘‘suit’’ for consistency in the revised title and with other titles of the United States Code. The words ‘‘and such forfeiture and damages shall be sued for in the same suit’’ are omitted as unnecessary be- cause of rules 8 and 10 of the Federal Rules of Civil Pro- cedure (28 App. U.S.C.). In clauses (1)–(3), the words ‘‘false or fraudulent’’ are substituted for ‘‘false, ficti- tious, or fraudulent’’ and ‘‘Fraudulent or fictitious’’ to eliminate unnecessary words and for consistency. In clause (1), the words ‘‘presents, or causes to be pre- sented’’ are substituted for ‘‘shall make or cause to be made, or present or cause to be presented’’ for clarity and consistency and to eliminate unnecessary words. The words ‘‘officer or employee of the Government or a member of an armed force’’ are substituted for ‘‘offi- cer in the civil, military, or naval service of the United States’’ for consistency in the revised title and with other titles of the Code. The words ‘‘upon or against the Government of the United States, or any depart- ment of the United States, or any department or officer thereof’’ are omitted as surplus. In clause (2), the word ‘‘knowingly’’ is substituted for ‘‘knowing the same to contain any fraudulent or fictitious statement or entry’’ to eliminate unnecessary words. The words ‘‘record or statement’’ are substituted for ‘‘bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition’’ for consistency in the revised title and with other titles of the Code. In clause (3), the words ‘‘conspires to’’ are substituted for ‘‘enters into any agreement, combination, or conspiracy’’ to eliminate unnecessary words. The words ‘‘of the United States, or any department or officer thereof’’ are omitted as sur- plus. In clause (4), the words ‘‘charge’’, ‘‘or other’’, and ‘‘to any other person having authority to receive the same’’ are omitted as surplus. In clause (5), the words ‘‘document certifying receipt’’ are substituted for ‘‘cer- tificate, voucher, receipt, or other paper certifying the receipt’’ to eliminate unnecessary words. The words ‘‘arms, ammunition, provisions, clothing, or other’’, ‘‘to any other person’’, and ‘‘the truth of’’ are omitted as surplus. In clause (6), the words ‘‘arms, equipments, ammunition, clothes, military stores, or other’’ are omitted as surplus. The words ‘‘member of an armed force’’ are substituted for ‘‘soldier, officer, sailor, or other person called into or employed in the military or naval service’’ for consistency with title 10. The words ‘‘such soldier, sailor, officer, or other person’’ are omit- ted as surplus. Editorial Notes REFERENCES IN TEXT The Internal Revenue Code of 1986, referred to in sub- sec. (d), is classified generally to Title 26, Internal Rev- enue Code. AMENDMENTS 2009—Subsecs. (a), (b). Pub. L. 111–21, § 4(a)(1), (2), added subsecs. (a) and (b) and struck out former sub- secs. (a) and (b) which related to liability for certain acts and defined ‘‘knowing’’ and ‘‘knowingly’’, respec- tively. Subsec. (c). Pub. L. 111–21, § 4(a)(4), substituted ‘‘sub- section (a)(2)’’ for ‘‘subparagraphs (A) through (C) of subsection (a)’’. Pub. L. 111–21, § 4(a)(2), (3), redesignated subsec. (d) as (c) and struck out heading and text of former subsec. (c). Prior to amendment, text read as follows: ‘‘For pur- poses of this section, ‘claim’ includes any request or de- mand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Govern- ment provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other re- cipient for any portion of the money or property which is requested or demanded.’’ Subsecs. (d), (e). Pub. L. 111–21, § 4(a)(3), redesignated subsecs. (d) and (e) as (c) and (d), respectively. 1994—Subsec. (e). Pub. L. 103–272 substituted ‘‘1986’’ for ‘‘1954’’. Page 337 TITLE 31—MONEY AND FINANCE § 3730 1 So in original. Probably should be a reference to Rule 4(i). 1986—Subsec. (a). Pub. L. 99–562, § 2(1), designated ex- isting provisions as subsec. (a), inserted subsec. head- ing, and substituted ‘‘Any person who’’ for ‘‘A person not a member of an armed force of the United States is liable to the United States Government for a civil pen- alty of $2,000, an amount equal to 2 times the amount of damages the Government sustains because of the act of that person, and costs of the civil action, if the per- son’’ in introductory provisions. Subsec. (a)(1). Pub. L. 99–562, § 2(2), substituted ‘‘United States Government or a member of the Armed Forces of the United States’’ for ‘‘Government or a member of an armed force’’. Subsec. (a)(2). Pub. L. 99–562, § 2(3), inserted ‘‘by the Government’’ after ‘‘approved’’. Subsec. (a)(4). Pub. L. 99–562, § 2(4), substituted ‘‘con- trol of property’’ for ‘‘control of public property’’ and ‘‘by the Government’’ for ‘‘in an armed force’’. Subsec. (a)(5). Pub. L. 99–562, § 2(5), substituted ‘‘by the Government’’ for ‘‘in an armed force’’ and ‘‘true;’’ for ‘‘true; or’’. Subsec. (a)(6). Pub. L. 99–562, § 2(6), substituted ‘‘an of- ficer or employee of the Government, or a member of the Armed Forces,’’ for ‘‘a member of an armed force’’ and ‘‘property; or’’ for ‘‘property.’’ Subsec. (a)(7). Pub. L. 99–562, § 2(7), added par. (7). Subsecs. (b) to (e). Pub. L. 99–562, § 2(7), added subsecs. (b) to (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2009 AMENDMENT Pub. L. 111–21, § 4(f), May 20, 2009, 123 Stat. 1625, pro- vided that: ‘‘The amendments made by this section [amending this section and sections 3730 to 3733 of this title] shall take effect on the date of enactment of this Act [May 20, 2009] and shall apply to conduct on or after the date of enactment, except that— ‘‘(1) subparagraph (B) of section 3729(a)(1) of title 31, United States Code, as added by subsection (a)(1), shall take effect as if enacted on June 7, 2008, and apply to all claims under the False Claims Act (31 U.S.C. 3729 et seq.) that are pending on or after that date; and ‘‘(2) section 3731(b) [probably should be section 3731] of title 31, as amended by subsection (b); section 3733, of title 31, as amended by subsection (c); and section 3732 of title 31, as amended by subsection (e); shall apply to cases pending on the date of enactment.’’ INCREASED PENALTIES FOR FALSE CLAIMS IN DEFENSE PROCUREMENT Pub. L. 99–145, title IX, § 931(b), Nov. 8, 1985, 99 Stat. 699, provided that: ‘‘Notwithstanding section 3729 of title 31, United States Code, the amount of the liability under that section in the case of a person who makes a false claim related to a contract with the Department of Defense shall be a civil penalty of $2,000, an amount equal to three times the amount of the damages the Government sustains because of the act of the person, and costs of the civil action.’’ [Section 931(c) of Pub. L. 99–145 provided that section 931(b) is applicable to claims made or presented on or after Nov. 8, 1985.] § 3730. Civil actions for false claims (a) RESPONSIBILITIES OF THE ATTORNEY GEN- ERAL.—The Attorney General diligently shall in- vestigate a violation under section 3729. If the Attorney General finds that a person has vio- lated or is violating section 3729, the Attorney General may bring a civil action under this sec- tion against the person. (b) ACTIONS BY PRIVATE PERSONS.—(1) A person may bring a civil action for a violation of sec- tion 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting. (2) A copy of the complaint and written disclo- sure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) 1 of the Federal Rules of Civil Procedure. The com- plaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so or- ders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information. (3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this sec- tion until 20 days after the complaint is un- sealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Proce- dure. (4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall— (A) proceed with the action, in which case the action shall be conducted by the Govern- ment; or (B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action. (5) When a person brings an action under this subsection, no person other than the Govern- ment may intervene or bring a related action based on the facts underlying the pending ac- tion. (c) RIGHTS OF THE PARTIES TO QUI TAM AC- TIONS.—(1) If the Government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the ac- tion. Such person shall have the right to con- tinue as a party to the action, subject to the limitations set forth in paragraph (2). (2)(A) The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been noti- fied by the Government of the filing of the mo- tion and the court has provided the person with an opportunity for a hearing on the motion. (B) The Government may settle the action with the defendant notwithstanding the objec- tions of the person initiating the action if the court determines, after a hearing, that the pro- posed settlement is fair, adequate, and reason- able under all the circumstances. Upon a show- ing of good cause, such hearing may be held in camera. (C) Upon a showing by the Government that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the Gov-