False Claims Act and Other Fraud Statutes
Eric S. Fulcher
June 25, 2008
The genesis of the False Claims Act can be found during our nation’s darkest hour. At a time when the United States was in danger of being irrevocably torn apart, unscrupulous individuals saw an opportunity to profit from their country’s misfortune. The war effort required a tremendous budget. With so much money changing hands, government contractors had ample opportunities to defraud the government and hide losses in a mountain of paperwork. Congress learned of several abuses that occurred early in the war and garnered embarrassing headlines. Purchase officers were accused of overpaying for lame and disabled horses, a practice that resonates to the present day with the term “horse trading.” In at least one instance, bullets provided to the Union forces contained sawdust instead of gunpowder. Men who had contacts in the government were often given substantial “commissions” for their ability to secure government contracts. The matter reached a boiling point in 1863, when Congress passed the False Claims Act in response to public outcry against government contract abuse.
