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Fourth Circuit Issues Important False Claims Act Decision

Fourth Circuit Issues Important False Claims Act Decision

In US ex rel. Badr v. Triple Canopy, Inc., the U.S. Court of Appeals for the Fourth Circuit, which includes Maryland, issued an important decision regarding the Federal False Claims Act (FCA). The FCA provides that any person who knowingly submits false claims for payment to the government may be liable for double the government’s damages, plus a penalty of between $5,500 to $11,000 per false claim.

This is an important case because it establishes the potential for FCA liability where government contractors submit invoices for payment to the United States while knowing they have not satisfied the core requirements of their contract.

In the case, the United States contracted Triple Canopy Inc. to provide security guards at a military base in Iraq. A core requirement of the contract was that the security guards pass marksmanship tests. The plaintiffs alleged that Triple Canopy Inc. violated the FCA and defrauded the government by falsifying the marksmanship records of the security guards. Triple Canopy Inc. challenged the sufficiency of the complaint, alleging that the plaintiffs had not properly alleged violations of the FCA because Triple Canopy had done nothing other than submit invoices to the United States.

The Fourth Circuit disagreed, ruling that the plaintiffs satisfied the pleading requirements of the FCA because “anyone reviewing Triple Canopy’s invoices would probably — but wrongly — conclude that Triple Canopy had complied with core contract requirements,” i.e., the guards were qualified marksmen. Accordingly, the plaintiffs’ allegations that Triple Canopy Inc. defrauded the United States were sufficient and the case will be allowed to proceed.

If you think your employer may be submitting false or fraudulent claims to the United States, the attorneys at Lebau & Neuworth may be able to assist you. For more information, contact us at 888-456-2529 or lebauneuworth.com/contact-us.

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