How is New York False Claims Act Different From Federal False Claims Act?
Other than filing requirements, and the fact that tax frauds are also included in New York’s False Claims Act, the New York law is substantially identical to the federal False Claims Act. Each state has its own rules and regulations regarding filing a state qui tam whistleblower reward case. But to facilitate filing a state qui tam case, Congress amended the federal False Claims Act to make it relatively easy to include New York claims as part of a federal qui tam lawsuit.
Under the New York False Claims Act whistleblowers can file a qui tam lawsuit under state law by filing a complaint in the appropriate Supreme Court (in New York the local trial courts are referred to as the Supreme Court). If you are also filing a federal False Claims Act lawsuit, the New York claims can be included in that case, and you do not have to file a separate lawsuit in the N.Y Supreme Court. If our case does not involve federal funds, you must file the case in the Supreme Court. Regardless of whether or not the complaint is filed in federal court or state court, the whistleblower is also required to serve the State of New York a copy of the complaint and a disclosure statement. Read the New York qui tam law for more detailed information.
The types of frauds covered under the N.Y False Claims Act are:
- COVID-19 Frauds — fraud in which New York government monies are used;
- Medicaid and Medicare Fraud — committed by doctors, hospitals and other types of medical care facilities; Unnecessary medical procedures billed to Medicaid or Medicare; Illegal marketing of drugs by pharmaceutical companies. The N.Y. False Claims Act would cover the monies spent by state, local or municipal governments. Healthcare fraud cases are almost always filed under both federal and state False Claims Acts, as these programs are generally funded by both federal and local monies;
- Education Fraud — for-profit colleges and universities violate the rules of the student loan programs improperly recruiting students to generate income;
- Bank & Mortgage Fraud — bankers submitting fraudulent claims for government insurance based on wrongful foreclosures;
- Tax frauds — this includes claims, statements or the filing of records under New York Tax laws. The tax provision only covers persons whose income was $1 million or more in the tax year(s) at issue;
- Underpayments to New York governmental entities — a reverse false claims action can occur when defendants knowingly make a false statement in order to avoid having to pay the government when payment is otherwise due;
- All claims covered under the federal False Claims Act that concern monies spent (or owed) to the New York (including state, local and municipal governments) or Fraud committed in obtaining contracts from the any New York governmental entity, or the willful failure to perform work under N.Y. government contracts.
Whistleblowers who present original information leading to sanctions against a violator of the New York False Claims Act, may file a qui tam lawsuit to receive protection and a reward. This includes actions against fraudsters who either present false claims to receive state or local government funds, embezzle these funds, or avoid paying the state back altogether. New York is currently the only state in the U.S. that allows whistleblowers to file a whistleblower lawsuit against individuals for violating state tax laws, when the individual’s income is $1 million or more.
If you’ve been witness to any violation of New York State False Claims Act law, you should consider speaking with a whistleblower attorney in NY who can help explain the law to you to see what kind of federal and state whistleblower rewards you could be eligible for.
Fines for Violating the New York False Claims Act
The New York False Claims Act rewards whistleblowers with credible information 3x the damages and penalties between $6,000 – $12,000, not including legal fees. If someone is self-reporting their own fraudulent behavior, they are subject to 2x the damages.
Federal law dictates that under the False Claim Act’s qui tam reward provision, if your original information results in a sanction against a fraudster, you are entitled to a minimum payment of 15% and a maximum payment of 30% of the proceeds collected by the government.
The Securities and Exchange Act, the Commodity Exchange Act, the Foreign Corrupt Practices Act, and the Dodd-Frank Act created enhanced provisions to protect the confidentiality of whistleblowers, and also permits Dodd-Frank whistleblowers to anonymously file reward claims. Both federal and New York state whistleblower protection laws allow employees to stop, report, or testify about an employer’s illegal, unhealthy, or unethical actions that violate public policies – without risking retaliation.
Kohn, Kohn & Colapinto cases have set precedents preventing companies from using settlement agreements as a way to persuade an employee from reporting fraud to government regulators. Our whistleblower attorneys have advocated for key reforms protecting federal employees to be included in the Whistleblower Protection Enhancement Act and have recommended provisions that strengthened whistleblower protections for corporate employees to incorporate into the Dodd-Frank and Sarbanes-Oxley Act.
Statute of Limitations
A civil action under article §192 of the New York False Claims Act, those filing a complaint of violations to the act must do so within ten years of the date on which the violation occurred. If you’re unsure whether a case is valid or not, you should get in touch with a NY whistleblower lawyer for a free and confidential case evaluation.