It is finally springtime here at Bracker & Marcus LLC. In Atlanta, Julie and I are running outside to bask in the warmth during breaks in our depositions. In D.C., Nate is jogging on Pennsylvania Avenue and enjoying the cherry blossoms. In New York, Anna is strolling down Broadway, breathing in the fresh (for New York) air.
Springtime represents new beginnings, and in that spirit, the new administration has disclosed a planned $3 trillion jobs and infrastructure proposal with two separate focuses.
In any situation where the government is pumping money into the economy, whether it be for pandemic relief or building a wall, opportunities for fraud are rife. The purpose of this blog is to more generally discuss why these types of spending plans make for an increase in False Claims Act cases.
If you have additional questions about your potential False Claims Act Case, set up a consultation with one of our Atlanta whistleblower attorneys.
More Jobs, More Whistleblowers
The first part of the plan is focused on jobs: the government will invest heavily in infrastructure, clean energy, and manufacturing, creating an estimated five million new jobs. The second part of the plan is focused on education, training, and benefits to bring individuals back into the job market.
In other words, jobs, jobs, and more jobs. Jobs and training programs that are funded by the government. This is the perfect recipe for five million new potential whistleblowers under the False Claims Act.
The False Claims Act is a statute under which individuals report fraud involving federal funding, where a party presents false claims for payment or where a party avoids an obligation to repay money to the government. Simply put, the more programs that exist and the more money that goes out, the more opportunities there are for fraudsters to take that money for themselves.
Funding new jobs is often done in one of three ways. First, the government may hire its own employees and perform its own services, such as by creating a new agency. Although the government can be wasteful, it cannot “defraud” itself, either factually or under the law. These circumstances rarely result in viable False Claims Act cases.
Second, the government may offer benefits or incentives to private entities to perform certain types of services on their own. For example, it could offer tax credits to companies that engage in research and development programs that result in less pollution.
If the benefits are tax-related, falsifying information to obtain those benefits could result in an IRS Whistleblower claim. If the benefits are not tax-related, such as when hospitals receive “incentive payments” for reaching electronic health record “meaningful use” thresholds, falsification of information to receive those benefits could result in a False Claims Act violation.
Third, the most common situation is that funds are made available to contractors or grant recipients to perform specific tasks. This is a standard False Claims Act fact pattern.
For example, the defendant may fraudulently induce the government into awarding a contract or grant, such as by proffering misleading information about qualifications or how the funds will be used. Or, the defendant may engage in fraudulent behavior in the execution of the contract, various examples of which are provided on our government fraud attorney page.
Private Contractors Drive Up False Claims Act Cases
It is the last category that we expect we will see the greatest influx in False Claims Act violations. Particularly when it comes to infrastructure, private contractors will generally bid for contracts to build bridges and pave roads. And with so many contractors engaging in so many projects at once, throughout the country, whistleblowers will be vital to ensuring that those projects are done properly.
Because one of the goals of the administration and of this plan is to revive the economy, it is likely that in many instances the government will favor small or disadvantaged businesses in the bidding process. Thus, one area of fraud to look out for will be businesses posing as minority, veteran, or women-owned, such as where they partner with a “figurehead” to qualify for these contracts.
Also, because there are serious repercussions to contractors cutting corners on these projects – collapsing bridges being an obvious example – it will take whistleblowers to ensure that the contractors are using the proper materials and meeting the correct specifications.
The second part of the president’s plan is to fund education and training. While not as obvious as cutting corners on building roads, we often see a similar type of fraud occurring where entities receive funding for a specific purpose and then do the bare minimum.
For example, a program that receives funding to perform on-the-job training for installing solar panels may just perform classroom instruction with no hands-on experience.
Report Government Fraud – Contact a False Claims Act Attorney Today
In sum, as government contracts and funds start to go out to private companies to rebuild our country and our economy, potential whistleblowers should be on guard for any misuse of those funds. Government fraud hurts us all, whether it be from increased taxes or direct real-world consequences ranging from potholed roads to major power outages to flooded cities.
If you are aware of any type of government fraud, please contact Bracker & Marcus LLC for a free evaluation of a potential False Claims Act or IRS Whistleblower case.