Earlier this month the Railroad Retirement Board announced in the May 2nd Federal Register that the statutory penalties associated with False Claims Act cases would be going way up. The underlying legislation spurring the increase is the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
Pursuant to the Act, the new, post-adjustment minimum penalty for a False Claims Act violation is $10,781.40, which is the result of multiplying the current minimum penalty of $5,000 by 2.15628 and the new, post-adjustment maximum penalty is $21,562.80, which is the result of multiplying the current maximum penalty of $10,000 by the same 2.15628.
These large increases will be adjusted annually in January so each year, the cost of violating the False Claims Act could go up. The initial increases become effective for claims that are made on or after August 1, 2016.
Unfortunately, the increases aren’t retroactive. However, on that topic, the Vermont False Claims Act just became retroactive via legislative inaction. Vermont’s False Claims Act was put into effect a little more than a year ago and it included a provision that it would not be retroactive until March 15, 2016, at which point the statute would be deemed to have retroactive application absent a legislative amendment to the contrary.
Well, no legislative action was undertaken so now the Vermont False Claims Act found at 32 V.S.A. § 639 can look back to cover false claims during applicable limitations provisions under Vermont law.
Both of these developments are good news for taxpayers who can now protect a greater taxpayer demographic and potentially recover much larger penalties from entities that are being paid by the government as a result of false claims.
Feel free to contact us if you have any questions.