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FCA* for BEGINNERS. *NEVADA FALSE CLAIMS ACT NRS 357.010 et seq. L. TIMOTHY TERRY The Terry Law Firm, Ltd. 775.883.2348. BRIEF HISTORY. ♦ Added to NRS in 1999; amended 2007 ♦ Patterned after Federal False Claims Act 31 U.S.C. §§ 3729 – 3733 Civil War Origins – “Lincoln Law”

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Fca for beginners

FCA* for BEGINNERS

*NEVADA FALSE CLAIMS ACT

NRS 357.010 et seq.

L. TIMOTHY TERRY

The Terry Law Firm, Ltd.

775.883.2348


Brief history
BRIEF HISTORY

♦ Added to NRS in 1999; amended 2007

♦ Patterned after Federal False Claims Act

31 U.S.C. §§ 3729 – 3733

Civil War Origins – “Lincoln Law”

♦ Approx 23 States with a FCA : CA, DE, D.C.,

FL,HI, IL, IN, LA, MD, MA, MI, NE, NV,

NH, NJ, NM, NY, OK, RI, TN, TX, VA, WI


Qui tam provision
QUI TAM” PROVISION

♦ “Qui tam” – loosely translated means one who sues for the state as well as for himself

♦ Allows a private individual, not injured by a

defendant’s conduct (and therefore not

an eligible plaintiff under traditional

notions of standing), to sue on behalf of

the government


The relator
THE “RELATOR”

♦ The “qui tam” plaintiff is commonly

referred to as the “Relator”

♦ Why become a Relator?

In addition to helping catch the bad

guys and protecting the government

treasury, the Relator also shares in

ultimate recovery ($$$) by the gov’t


Fca liability
FCA LIABILITY

♦ Liability imposed on any person(s) who,

with or without specific intent to defraud, commit any of the acts listed in NRS 357.040

♦ Primary violations :

(a) knowingly presenting, or causing to

be presented, a false claim for payment

or approval

(b) knowingly making or using, or causing

to be made or used, a false record or statement

to obtain payment or approval of a false claim


Fca liability con t
FCA LIABILITY Con’t

♦ Primary violations con’t:

(c) conspiring to defraud by obtaining

allowance or payment of a false claim

♦ Statute specifies 5 more activities giving

rise to FCA liability

♦ Liability is joint and several for an act

committed by two or more persons

♦ State, or any political subdivision, can be victim


Definitions
DEFINITIONS

♦ “Knowingly”

A person acts “knowingly” with respect

to information if (s)he : (a) has

knowledge of the information; (b) acts

in deliberate ignorance of whether the

information is true or false; or (c) acts

in reckless disregard of the truth or

falsity of the information – 357.040(2)


Definitions con t
DEFINITIONS Con’t

♦ “Claim” – 357.020

Means a request or demand for money,

property or services made to: (a) an

officer, employee or agent of the state

or political subdivision; or (b) a contractor,

grantee or other recipient of money

from the state or political subdivision

if any part of the money, property or

services requested or demanded was

provided by the state or political subdivision


Definitons con t
DEFINITONS Con’t

♦ “Political subdivision” – 357.030

Means a county, city, assessment district

or any other local government as defined

in 354.474


Fca damages
FCA DAMAGES

♦ 357.040(1) :

Defendant liable to gov’t for:

(a) 3 x actual damages

(b) costs of litigation

(c) civil penalty of not less than $5K or

more than $10K for each act

♦ 357.180(1) :

Defendant separately liable for Relator’s attorney’s fees and litigation costs


Limitation on damages
LIMITATION ON DAMAGES

♦ Defendant can avoid civil penalties and award of litigation costs if :

(a) def furnished all info re the fraudulent act to the gov’t w/in 30 days of becoming aware of info, and

(b) def fully cooperated with any gov’t investigation, and

(c) no crim pros or civ/admin proceeding had been commenced with respect to fraudulent act at time info was furnished to gov’t, and

(d) at time info was furnished to gov’t def had no

knowledge of the existence of any investigation re the

fraudulent act


Fca litigation
FCA LITIGATION

♦ Relator :

1) files complaint under seal

2) does not serve defendant(s)

3) sends copy of complaint to AGO

(ret rec req) on filing date

4) sends disclosure statement with complaint to AGO which must substantially cover all material evidence and info the Relator possesses

5) complaint may be filed in any judicial district in which the def can be found, resides or transacts business


Fca litigation con t
FCA LITIGATION Con’t

♦ Government/AGO :

1) must investigate complaint’s allegations

2) decide w/in 60 days whether to intervene (for good cause

shown the gov’t may seek extensions of the 60

day deadline)

3) if gov’t intervenes, the complaint must be unsealed and

served on def

4) if gov’t declines intervention, relator takes over litigation of

case (complaint unsealed and served on def)

5) after declining intervention, gov’t may seek to intervene

if relator not adequately protecting gov’t interests


Limitations re defendants
LIMITATIONS re DEFENDANTS

♦ Can’t bring an FCA action :

1) against member of legislature, judiciary or elected officer of state executive department, or member of governing body of political subdivision,

if action based upon evidence or info already

known to gov’t

2) if based upon allegations or transactions

that are subject of a civil action or admin proceeding for a monetary penalty to which

the gov’t is already a party - 357.080(3)


Limitations re relators
LIMITATIONS re RELATORS

♦ Can’t bring an FCA action :

1) for fraud discovered in gov’t employment, unless fraud reported to gov’t officials who

fail to act on info for at least 6 months

– 357.090

2) based upon public disclosure of info in:

a) crim, civ or admin hrg; b) legislative

hrg or audit (or political subdivision

audit); c) the news media; UNLESS filed

by AGO or an “original source” of the info

- 357.100 [357.100(2) defines original source]


Relator s recovery
RELATOR’S RECOVERY

♦ Intervened cases :

- not less than 15%

- not more than 33%

♦ Declined cases :

- not less than 25%

- not more than 50%

♦ Gov’t employee cases (even if relator benefited from fraud)

- no minimum

- not more than 33% (intervened cases)

- not more than 50% (declined cases)


Additional resources
ADDITIONAL RESOURCES

♦ Civil False Claims and Qui Tam Actions

(3rd Ed) by John T. Boese (Wolters Kluwer – Publishers)

♦ Taxpayers Against Fraud

www.taf.org


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