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Fraud Against State Governments

Many states have passed their own “False Claims Acts” to encourage whistleblowers to come forward with knowledge of fraud against the state, and many other states are now considering such laws.  Because the federal False Claims Act has been so successful in encouraging whistleblowers to report fraud, Congress has offered the states  a large financial incentive if they pass a whistleblower law that is at least as effective as the federal False Claims Act.  States that qualify will receive  a 10% increase in their share of Medicaid fraud recoveries.

Many of these cases under the state False Claims Acts concern health care. For example, Texas recovered $45.5 million in 2004 from pharmaceutical companies in case alleging overstating the price of prescription brand-name and generic-brand drugs. The Texas Attorney General’s Office announced that the settlement would have occurred if the state had no whistleblower statute. 

Cases under the federal False Claims Act can often also involve liability under one or more state False Claims Acts.


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