It’s Time To Pass a State False Claims Act in PA

The Commonwealth of Pennsylvania continues to miss numerous golden opportunities to collect millions of dollars in taxpayer monies from individuals and corporations who defraud the Commonwealth. In order to rectify the situation the legislature needs to enact a State False Claims Act.   The Act, would allow the Commonwealth to recover taxpayer funds, inclusive of triple damages and penalties, from those who defraud it.  In addition, it would also provide numerous protections for potential whistleblowers who often must risk their careers and livelihood to blow the whistle on fraud.   Currently pending before the Pennsylvania House of Representative is H.B. 1493, proposed by State Rep., Brandon P. Neuman, which would provide the necessary tools for the Commonwealth to recover the maximum amount possible from those who defraud the Commonwealth.  The pending legislation would include a qui tam provision, which is a financial incentive, for whistleblowers to come forward with original information.  In addition to allowing whistleblowers to share the proceeds of any recovery, the proposed Act will also provide the necessary protections from employer retaliation, which could include lost wages and reinstatement.

Currently, 29 states and the federal government have acted False Claims Acts.  In addition, several municipalities also have False Claims Acts on the books including but not limited to Philadelphia, Chicago and New York City.  However, Pennsylvania remains the largest state in the entire nation void of a False Claims Act.  This information is not new to my home state’s legislature.  As a leader in the industry, myself, along with other qui tam attorneys, have attempted for years to gather the necessary support to obtain a False Claims Act.  It is my opinion that a commonsense legislation, such as protecting our own taxpayer monies, while providing whistleblowers with the incentive and protections to come forward with original information concerning fraud against the Commonwealth, is a no-brainer.

Since 2005, the Federal government has provided an additional financial incentive for States to prosecute their own cases of fraud. Such cases involve joint state and federal programs such as Medicaid and other numerous healthcare programs. Since the amendments in 1986, the Federal False Claims Act has been an enormous success in recovering taxpayer monies.   For example, between 1986 and 2011, Federal false claim settlements and judgments have totaled more than $31 billion.  It is worth noting that the federal government is not the only one profiting from these acts.  For example, over the last six years alone, the State of Texas has recovered more than $394 million from fraud cases in which Texas was the leader of the investigation and prosecution pursuant to its False Claims Act.

It should be noted that the Federal False Claims Act does not protect the Commonwealth of Pennsylvania and it taxpayers’ monies.  As a resident of Philadelphia, a city that cannot afford to have full-time nurses, guidance counselors, and additional staff in its public schools, a False Claims Act would go a long way towards improving the public programs throughout the Commonwealth.  It is time for the lawmakers to come together and pass a sensible bill to protect it.   For all of the aforesaid reasons, I proudly and strongly support H.B. 1493.

Young Law Group, P.C., represents whistleblowers in the United States and abroad, in a variety of cases, including IRS Whistleblowers, False Claims Act (Qui Tam), and SEC related fraud.  For a free confidential consultation, please call Eric L. Young, Esquire at 1-800-590-4116 or email to eyoung@young-lawgroup.com.