Financial Services Qui Tam Cases

False Claims Act liability arises from the use of false or fraudulent statements in loan applications to federal agencies. For example, in one case, the Government alleged that the defendant company submitted false claims to the Commodity Credit Corporation (“CCC”). The CCC was a government agency with the authority to grant loans in amounts not exceeding 80% of the actual purchase price of grain storage bins to grain growers. In support of a loan application, the grain grower was required to submit an invoice showing the purchase price and amount of down payment.

The Government alleged that the defendant company, which was engaged in the selling of storage bins, intentionally overstated the purchase price on storage bins sold to twelve farmers. These invoices were submitted with the loan application by the farmers for the purpose of inducing the CCC to offer loans to the farmers for amounts exceeding 80% of the actual purchase price. The CCC made loans to these farmers in reliance of the purchase price stated on the invoices submitted with the loan application.

The defendant company moved to dismiss the case because the Government failed to show that the defendant company’s preparation of the invoices constituted a false claim under the False Claims Act. The Supreme Court disagreed, and held that the meaning of claim under the False Claims Act CA includes all fraudulent attempts to cause the Government to pay out sums of money. The Supreme Court did not reach the issue of liablilty in the case.

For more information and case citations, please see “Federal False Claims Act and Qui Tam Litigation,” published by Law Journal Press (2006).

For more information, email quitam@bafirm.com.

Notice

This website is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this website also does not result in the formation of a lawyer-client relationship.

You should be aware that qui tam claims are subject to a Statute of Limitations. The area of limitations periods is complex. There are also first to file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.