Reporting Fraud Under the New York False Claims Act
The New York False Claims Act (“New York FCA”) was originally enacted on April 7, 2007 and was modeled after the Federal False Claims Act (“Federal FCA”). At the time of passage, the provisions were nearly identical to the then-1986 version of the federal False Claims Act.
However, in 2009 and 2010, Congress amended the federal FCA. New York followed suit, amending the New York FCA in August 2010. Although largely identical to the federal FCA, the New York FCA differs in some significant respects.
First, the New York FCA allows for three times the damages (two times the damages for voluntary and immediate self-reporting of fraud) and civil penalties of $6,000 to $12,000 per violation in addition to attorneys fees and costs. The federal FCA allows for $5,500 to $11,000 per violation.
New York False Claims Act Includes Tax Fraud
Second, the New York FCA does not exclude tax fraud like the federal FCA does. It should be noted, however, that the New York FCA can be used for tax fraud only if the defendant has “net income or sales” of $1 million or more and damages as plead are greater than $350,000.
New York False Claims Act Statute of Limitations is 10 Years
Third, the New York FCA includes a ten year statute of limitations, and states that amendments apply retroactively to claims, records and statements. The federal FCA has a statute of limitations of six years.
New York Qui Tam and False Claims Act Whistleblowers
Fourth, the New York FCA allows for a whistleblower and his/her New York qui tam lawyer(s) to withdraw his/her case in secret if the government declines to intervene. Under the federal FCA, once the government declines and the case is unsealed, the whistleblower cannot withdraw his/her case under seal.
New York False Claims Act Anti-Retaliation
Fifth, New York qui tam lawyers should note the anti-retaliation protections in the New York FCA are stronger than the protections in the federal FCA. The anti-retaliation protections in the New York FCA cover current and former employees, agents and contractors, and the person does not have to file a qui tam lawsuit to be protected. The New York FCA also contains anti-blacklisting provisions, a ten day statute of limitations and damages are two times the pay plus interest.
New York City False Claims Act
Additionally, New York City also has its own false claims act. Mayor Michael Bloomberg signed the New York City False Claims Act in 2005, allowing citizens to bring lawsuits to recover damages for fraudulent claims submitted to the City.
Previous New York False Claims Act Cases
The New York State Attorney General’s Office has prosecuted numerous New York qui tam cases, recovering funds for both the state government and New York taxpayers:
- My Pillow Inc.: In August 2016, pillow company My Pillow Inc. agreed to pay $1.1 million to resolve a whistleblower suit alleging the company knowingly failed to collect state and local taxes, violating the New York FCA.
- St. Joseph’s Hospital Health Center: Also in August 2016, St. Joseph’s Hospital Health Center agreed to pay $3.2 million to settle a whistleblower suit accusing the health center of violating the New York and federal False Claims Acts by billing Medicaid for mental health services provided by unqualified staff.
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