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What You Should Know About California False Claims Act

California was one of the early adopters of the False Claims Act legislation after passing a law in 1987. The California False Claims Act states that a defendant can be liable for a false claim when a political subdivision gives any portion of the funds. Remember that a political subdivision in the act refers to any city, county, assessment district, or other legally authorized local entities that have jurisdiction boundaries. 

Therefore, liability can extend to any act that is committed to defraud towns and cities located within the state. As you can see, the California False Claims Act is perhaps one of the best whistleblower laws around. This article explains everything you need to know about California False Claims Act.

The reward

It’s worth noting that California False Claims Act allows a whistleblower to be given a significant reward. A relator can get between 15 and 33 percent of the money recovered by the California State in an action that is taken by the political subdivision or state. 

Besides, a relator can also get a minimum of at least 25 to 50 percent of the funds in a successful case, especially if the subdivision or state doesn’t intervene. Litigating a case without the help of the state can be hard, but the chances of getting a 50 percent of the reward may encourage relators to consider this option.

Forms of fraud not allowed in the California False Claims Act

The California False Claims Act tends to create liability and gives treble damages and even civil fines on activities that are similar in the federal False Claims Act. Keep in mind that there is usually liability if a false claim is presented utilizing false records so that you can receive compensation. Also, there are statutes that list conspiracy as well as many other forms of False Claims Act violations. 

Besides creating liability for these forms of fraudulent activities that the Federal False Claims Act disallows, the California law allows an entity to sue any defendant who happens to have benefited from unintended submission of a false claim. 

This person may have discovered that the claim was false but decided not to disclose it to the political subdivision or state within a reasonable time after discovering the false claim. So in other words, it means if you decide to be a whistleblower but fail to take that chance, you can be held liable. 

It can be hard to figure out the number of cases that have been filed or even the number of cases that led to recovery. This is because a contractor can sometimes inadvertently keep funds belonging to the state of California. 

However, this theory of liability can cause some interesting cases or even add to the damages related to a fraudulent scheme. Contractors are not supposed to get funds from a state government and hold it knowing that it was obtained due to a wrongful claim or wrongfully. Hence, it can be good to see other states that are ready to make this actionable.