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Does the False Claims Act Prohibit Fraudulent Inducement of a Contract?

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Fraudulent Inducement of a Contract and False Claims Act Liability

Where a contract is “procured by fraud,” False Claims Act liability flows from fraudulent inducement.  Examples of fraudulent inducement include:

  • the contractor knowingly provides the government with price lists and discounts containing false information in order to induce it to enter into the contract;
  • the contractor makes an initial misrepresentation about its capability to perform the contract in order to induce the government to enter into the contract; or
  • a party makes promises at the time of contracting that it intends to break.

false claims act lawyersWhere a defendant causes a contract to be procured by fraud, all claims for payment made under that contract are deemed false for purposes of the False Claims Act, even if the claims do not themselves contain a false statement. U.S. ex rel. Marcus v. Hess, 63 S. Ct. 379, 384 (1943)(holding the initial act of fraud to induce government contract “tainted” every subsequent claim for payment); see also U.S. ex rel. Main v. Oakland City Univ., 426 F.3d 914, 917 (7th Cir. 2005).  The core issue is whether the defendant entered into a government contract with the intent not to perform or with the knowledge that it could not perform as promised.” U.S. ex rel. Blaum v. Triad Isotopes, Inc., 104 F. Supp. 3d 901, 914 (N.D. Ill. 2015).

Whistleblower Lawyers Representing False Claims Act Qui Tam Whistleblowers

The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees.  To schedule a free consultation, click here or call us at 202-262-8959.

In conjunction with co-counsel, Zuckerman has successfully represented whistleblowers disclosing off-label marketing, Medicare fraud, medical device fraud, and student loan fraud.

Our experience includes:

In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon.  Before hiring a lawyer for a high-stakes whistleblower case, assess the lawyer’s reputation, prior experience representing whistleblowers, knowledge of whistleblower laws and prior results.  And consider the experience of other whistleblowers working with that attorney.  See our client testimonials by clicking here.

  • U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area.

Zuckerman Law has written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:

 

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Categories: False Claims Act and Qui Tam , False Claims Act whistleblower protection , Whistleblower Rewards and Bounties

About the author

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Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.