False Claims Reform Act
Price gouging by military contractors triggered the drafting and passing of the False Claims Reform Act. This was in 1986. The legislation provided the federal government more power and tools to recover losses due to fraud against the government. The False Claims Reform Act amended the Qui Tam and provides greater financial incentives and legal protection to private citizens who, with the help of discrimination attorneys, bring suits on behalf of the government. These private individuals are commonly referred to as “whistleblowers”.
A Potential Area of Abuse
A recent trend in qui tam is in the area of mortgage and financial fraud. The stage for fraud is set when you combine the recent downturn in the economy with the deep involvement of the government in the mortgage and financial markets. We are seeing an increase in mortgage fraud and financial fraud.
The government saw the need to rescue the economy. In response, the government has invested in a number of high cost strategies. These strategies included the buying up of troubled assets from financial institutions. These assets added up to billions. The Federal Housing Administration (FHA) provides mortgage insurance to lenders for more than 30% of all home mortgages. For the lender, mortgage insurance takes the risk out of the homeowner defaulting on their mortgage. As a result, some lenders have behaved badly.
A Response to the Abuse
In 2009, The Fraud Enforcement and Recovery Act expands the ability to report and recover fraud to the mortgage industry and housing industry. The scope of the mortgage and housing fraud is broad. Some examples of fraudulent behavior include falsification of loan documents, false appraisals and sham transactions using straw purchasers. The number of whistleblowers who have went to discrimination attorneys to report fraud in these areas has been on the rise. With increasing foreclosure rates, along with government involvement and money, potential fraud involving government funds is high. This is bound to result in continued increases in Qui Tam litigation.
What Can I Do?
As any New York discrimination attorney will tell you, under Federal law you and your job are protected for reporting fraud. You can also help hardworking taxpayers from being ripped off by corporate greed and dishonest business practices.
Your discrimination attorneys may also tell you that if you are aware of large scale fraud against the government, your reward could be in the millions of dollars. By law, you could collect between 15% and 30% of the total amount of the fraud. To date, the amount rewarded to whistleblowers has exceeded three billion dollars.
Whistleblower Qui Tam and the Housing Market
False Claims Reform Act