Written By Zachary Newland, Founding Partner. Last updated on August 10, 2026.

Federal False Claims Act: What You Need to Know When the Government Alleges Fraud

On This Page

• What Is the Federal False Claims Act?
• How the Federal False Claims Act Works
• Civil Penalties, Criminal Exposure, and Parallel Investigations
• What to Do If You Are Facing a Federal False Claims Act Investigation
• How Evergreen Attorneys Can Help
• Frequently Asked Questions

A Federal False Claims Act investigation can put your business, professional license, personal assets, and freedom at risk. The federal government uses this statute, codified at 31 U.S.C. §§ 3729–3733, as its primary weapon against individuals and organizations it believes have defrauded a federal program, and the Department of Justice routinely pairs civil FCA proceedings with criminal investigations under 18 U.S.C. §§ 286 and 287.

If you are a healthcare provider, government contractor, or business owner who has received a civil investigative demand, a qui tam complaint, or a federal subpoena related to false claims, the decisions you make in the first days and weeks of the investigation will shape everything that follows.

Contact Evergreen Attorneys today at (303) 948-1489 for a confidential case evaluation with a federal criminal defense lawyer.

What Is the Federal False Claims Act?

The Federal False Claims Act is a civil enforcement statute that imposes liability on any person who knowingly submits, or causes the submission of, a false or fraudulent claim for payment to the United States government. Under 31 U.S.C. § 3729, “knowingly” means:

acting with actual knowledge, deliberate ignorance, or reckless disregard of the truth or falsity of the information. You do not need to intend to defraud the government; submitting claims you should have known were false can be enough.

The statute covers several categories of conduct:

• Presenting or causing the presentation of a false or fraudulent claim for payment or approval.
• Making or using a false record or statement material to a false claim.
• Conspiring to submit a false claim.
• Knowingly concealing or improperly avoiding an obligation to pay money back to the government (known as a “reverse false claim”).

FCA liability arises across a wide range of industries. Federal healthcare programs such as Medicare and Medicaid are among the most common enforcement targets, but the statute also reaches defense contracting, CARES Act and PPP loan fraud, disaster-relief programs, research grants, and virtually any context in which federal funds change hands.

How the Federal False Claims Act Works

FCA enforcement follows two primary tracks: government-initiated investigations and qui tam whistleblower lawsuits.

Government-Initiated Investigations

The DOJ Civil Division or a U.S. Attorney’s Office may open an FCA investigation based on audit findings, agency referrals from HHS-OIG or other inspectors general, or tips. Early steps often include issuing a civil investigative demand (CID) that compels the production of documents, interrogatory answers, or oral testimony. How you respond to a CID can significantly affect the trajectory of the case.

Qui Tam Whistleblower Lawsuits

The Federal False Claims Act’s qui tam provision allows a private person, called a relator, to file a sealed lawsuit in federal court alleging fraud on behalf of the United States. After the complaint is filed under seal, the government investigates and decides whether to intervene and take control of the case. If the government intervenes, the relator may receive between 15 and 25 percent of any recovery. If the government declines to intervene and the relator proceeds independently, the relator’s share can reach 30 percent.

Defendants typically learn about a qui tam lawsuit only after the seal is lifted or after the government begins issuing subpoenas and CIDs during the sealed investigation phase. By that point, the government may have already gathered substantial evidence.

Colorado’s Supreme Court-proven Federal Criminal Defense Team.

Civil Penalties, Criminal Exposure, and Parallel Investigations

The consequences of an FCA violation are severe and compound quickly.

Civil Penalties Under the FCA

A defendant found liable under the FCA must pay treble damages (three times the government’s actual loss) plus a civil penalty for each false claim submitted. The per-claim penalty is adjusted annually for inflation and currently can exceed $20,000 per violation. In healthcare billing cases involving thousands of claims, total exposure can reach tens of millions of dollars.

Criminal Exposure Under Parallel Statutes

The same conduct that gives rise to FCA civil liability can trigger criminal prosecution under separate federal statutes:

• 18 U.S.C. § 287 makes it a crime to knowingly present a false, fictitious, or fraudulent claim to a federal department or agency.
• 18 U.S.C. § 286 criminalizes conspiracy to defraud the government with respect to claims.

Both statutes carry potential imprisonment and substantial fines. The DOJ frequently runs parallel civil and criminal investigations, meaning a provider or business can face a federal grand jury subpoena at the same time it is responding to a civil FCA action or qui tam lawsuit.

Healthcare-Specific Risks

For providers billing Medicare, Medicaid, or TRICARE, FCA liability carries additional consequences. HHS-OIG can seek exclusion from all federal healthcare programs, effectively ending a provider’s ability to treat the majority of patients. Providers also risk parallel criminal healthcare fraud charges, loss of state licensure, and collateral regulatory sanctions. Evergreen Attorneys’ federal healthcare fraud defense practice addresses these overlapping threats.

What to Do If You Are Facing a Federal False Claims Act Investigation

If you have received a CID, a qui tam complaint, a grand jury subpoena, or any indication that the government is investigating your billing, contracting, or program participation, take the following steps:

1. Stop discussing the investigation with employees, partners, or anyone other than your attorney. Statements made during this period can become evidence in both civil and criminal proceedings.
2. Preserve all documents, electronic records, billing data, and communications that could be relevant. Destroying or altering evidence after you are aware of an investigation can result in obstruction charges.
3. Retain federal defense counsel who understands both the civil FCA framework and the criminal statutes that run in parallel. An attorney experienced only in civil compliance may not recognize the criminal exposure until it is too late to protect your rights.
4. Do not respond to a CID, subpoena, or government interview request without counsel. The scope of your legal obligations and the risks of voluntary disclosure differ significantly depending on the procedural posture of the case.
5. Assess whether any obligation exists to return overpayments or self-disclose. Under the FCA’s reverse false claims provision, knowingly retaining an overpayment can itself constitute a violation.

How Evergreen Attorneys Can Help

Evergreen Attorneys represents individuals, healthcare providers, and businesses facing federal False Claims Act investigations, qui tam whistleblower lawsuits, and parallel criminal proceedings under 18 U.S.C. §§ 286 and 287. The firm’s federal white collar crime defense attorneys handle complex DOJ enforcement matters that combine civil FCA liability with criminal healthcare fraud exposure, government contracting fraud, and related federal fraud charges.

Zachary Newland, the firm’s Founding Partner, has appeared as counsel of record in more than 120 federal cases since 2016. The firm provides partner-level representation at every stage, from the initial CID or subpoena response through grand jury proceedings, trial, and, if necessary, appeal.

Frequently Asked Questions

What types of fraud does the Federal False Claims Act cover?

The FCA covers any knowing submission of false or fraudulent claims for payment to the United States government. Common enforcement areas include Medicare and Medicaid billing fraud (such as upcoding, unbundling, and billing for services not rendered), defense contracting fraud, PPP and CARES Act loan fraud, research grant fraud, and customs and import fraud. The statute also applies to reverse false claims, where a person or entity knowingly conceals or avoids an obligation to return money owed to the government.

How does a qui tam whistleblower lawsuit create criminal risk?

A qui tam lawsuit is filed under seal, giving the government time to investigate before the defendant is notified. During this sealed period, the DOJ may coordinate with criminal prosecutors and federal agents to develop evidence for both civil and criminal cases simultaneously. If the evidence gathered through the qui tam investigation reveals conduct that meets the elements of 18 U.S.C. § 287 (criminal false claims) or 18 U.S.C. § 286 (conspiracy to defraud the government), a parallel criminal prosecution may follow. Defendants who respond to a qui tam without understanding this dual exposure risk making admissions that can be used in the criminal case.

Can a healthcare provider face exclusion from federal programs because of FCA liability?

Yes. HHS-OIG has authority to exclude individuals and entities from Medicare, Medicaid, and all other federal healthcare programs based on FCA violations. Exclusion can be mandatory or permissive depending on the underlying conduct and any related criminal conviction. For most providers, exclusion effectively ends the ability to practice because the majority of patients are covered by federal programs. Exclusion proceedings may run alongside the FCA case and any criminal prosecution, creating a third front that requires coordinated defense.

When should a person or business involve federal defense counsel in a False Claims Act matter?

Retain counsel as soon as you become aware of any government inquiry related to your billing, contracting, or federal program participation. This includes receiving a civil investigative demand, a subpoena, a qui tam complaint, notice of an audit by HHS-OIG, or contact from federal agents. The earlier experienced federal counsel is involved, the more effectively they can protect your rights during document production, prevent inadvertent admissions, assess criminal exposure, and position the case for the best available resolution.

If you are facing a federal False Claims Act investigation, a qui tam whistleblower lawsuit, or related criminal fraud charges, contact Evergreen Attorneys at (303) 948-1489 for a free and confidential case evaluation today.