False Claim for Payment or Approval: U.S.C. Section 3729(a)(1)(A)

Violations of 31 U.S.C. section 3729(a)(1)(A) encompass virtually all types of False Claims Act cases and are by far the most common type of violation.

In fact, it is quite rare to file a False Claims Act case that does not contain a violation of this subsection. There are as many ways to violate this subsection as there are government contracts. As such, the most important part of almost every False Claims Act suit is identifying the false claims that occurred.  Learn more about identifying false claims here.

A person violates section 3729(a)(1)(A) when he or she “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.”

Presenting a False Claim

A person “knowingly presents… a false or fraudulent claim for payment or approval” when he or she:

  1. presents a claim,
  2. to the federal government,
  3. that he knows contains implicitly or explicitly false information.

In addition you should also explain how the false information is material to the government’s decision to pay the claim.  While the text of 3729(a)(1)(A) does not actually include a materiality requirement, most courts have nevertheless inferred that one exists, and it is difficult to imagine how one could prove damages to the government for a claim that is not materially false.

The most basic example of a 3729(a)(1)(A) violation is a contractor who sends the government an invoice for work he did not perform.  This type of claim often arises in service contracts that are paid hourly, where a contractor falsifies time sheets and bills the government for hours that were not worked.  Double billing, where a contractor bills the government twice for the same work, also falls into this category, as does billing the government for work that was actually performed for a private client.  The false information in these claims is material to the government’s decision to pay because the government will obviously not pay for work that has not actually been performed, or was not performed for the government.

Another common example is a medical service provider who knowingly enters the wrong billing code on a Medicare reimbursement form.  In that case, it does not matter whether someone entered a code for a procedure that was more or less expensive than the procedure actually performed.  So long as the service provider billed the government for a procedure they did not perform they violated 3729(a)(1)(A).

Other forms of 3729(a)(1)(A) violations include deceptive pricing, where a contractor will falsify the costs of materials or services.  A building contractor who sends the government a bill for $500,000 worth of construction materials, but who only purchased $350,000 of materials, has presented a false claim.

False claims can also be presented to government contractors.  The definition of a claim includes claims presented to anyone who is authorized to spend government money, which includes general contractors on a government project.  As such, a subcontractor who presented any of these false claims to a general contractor on a government contract would also be liable.

Regardless of the form of the false claim, it is important to remember that the conduct that triggers liability under section 3729(a)(1)(A) is the act of presenting the claim to the government.  If a contractor creates a false claim, then has a change of heart and doesn’t present it to the government, no violation of section 3729(a)(1)(A) has occurred.

Causing a False Claim to be Presented

A person “knowingly… causes to be presented, a false or fraudulent claim for payment or approval” when he or she:

  1. knowingly does something that makes someone else transmit a claim,
  2. to the government,
  3. that he or she knows contains implicitly or explicitly false information.

A common example of this type of violation occurs when a subcontractor engages in fraudulent behavior and presents an invoice to the general contractor, who in turn presents an invoice to the government for the subcontractor’s work.  Thus, a subcontractor who bills a general contractor for 200 hours of work, when the subcontractor knows that there was only 150 hours of work involved, causes the general contractor to present a false claim.

In this example, the subcontractor has also presented a false claim, since presenting a claim to a government contractor is also a violation of 3729(a)(1)(A).

In any case of this type, it does not matter whether the person who ultimately presents the false claim to the government is aware of its falsity. In fact, usually they are not.  The subcontractor can present a fraudulent claim to the general contractor without the general contractor having any idea of the fraudulent nature of the claim.  If the general contractor then unknowingly presents the claim to the government in any form, the subcontractor will have caused a false claim to be presented to government.

No Explicit False Statement is Necessary

While most false claims contain explicit statements that are materially false, this is not required for a violation of 3729(a)(1)(A).  A claim may also be implicitly false, meaning that it causes the government to assume that something is true without actually coming out and saying so.  When a contractor presents a claim, he or she implicitly certifies compliance with all material contract terms and all relevant laws and regulations.  If he has or she has not actually complied with such terms and laws, then the claim is  false, even though it does not contain an explicit false statement.  A further discussion about implicit certification cases can be found here.

Knowledge Requirement

In order to violate the False Claims Act, a person who presents or causes a false claim to be presented must do so knowingly.  This means the person must know that the claim is false. This does not mean that the person must know about the False Claims Act, or that his or her actions might violate it. Knowing that the claim is false is sufficient to create liability under the Act.

No Damages are Necessary for a False Claims Act Violation

Regardless of the type of 3729(a)(1)(A) violation, the conduct that triggers liability is the presentation of a false claim to the government.  It does not matter whether the government actually pays that false claim, the fact that it was presented is enough.  Of course, if the government did not actually pay any money, then a person’s liability is likely limited to civil penalties and it will be difficult to obtain a large collection in that case.

Liability for Presenting or Causing a False Claim

A person who knowingly presents a false claim, or knowingly causes someone else to present a false claim, is liable for three times the amount paid by the United States on that claim.  That person is also liable for civil penalties of between $5,500 and $11,000 for each false claim. This civil fine has been increased by laws, which adjust all such penalties for inflation.