Higgs Fletcher & Mack LLP

California False Claims Act-Sacramento's Weapon Against Fraudulent Government Contractors
by Catherine C. Morrison

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�	California False Claims Act-Sacramento's Weapon Against Fraudulent Government Contractors
�	Attorney Contact Information

W ith the budget crisis continuing to threaten the financial stability of local governments throughout California, the California False Claims Act should become a useful device in combating frivolous fraudulent lawsuits against municipal entities.

The California False Claims Act prohibits an individual, corporation, or other entity from knowingly making a false demand for money from a public entity. The term "knowingly" includes actual knowledge as well as deliberate ignorance and/or reckless disregard of the truth or falsity of the information submitted in support of the demand. Proof of specific intent to defraud the entity is not required. Examples of the type of conduct that can carry false claims liability include:

Falsification of time card hours
Overstatement of wage rates and overhead
Seeking payment for costs not incurred on the contract
Seeking payment twice for the same work
Seeking payment for costs not allowed under the contract
Falsification of a request for equitable adjustment

The California False Claims Act, modeled after the Federal False Claims Act, was enacted in the 1980s. It provides for significant penalties upon a showing of an actual violation. Not only can the entity recover the true monetary loss it incurred as a result of the false claim, but it can also recover a $10,000 civil penalty for each violation, as well as reasonable costs and attorneys fees. Criminal liability may also exist upon a showing of mail fraud or purposeful misstatement associated with the false claim.

Any questions concerning the new requirements should be directed to Catherine Morrison, a member of the Construction Law and Litigation Department at Higgs Fletcher & Mack LLP.

Higgs Fletcher & Mack has been serving the needs of San Diego businesses and residents since 1939, and offers a full range of legal services in both transactional and litigation matters. The Firm is committed to integrity, thoroughness, and care in striving to achieve outstanding results for clients.