I have been blogging about a wonderful continuing legal education conference
I recently attended in Washington, D.C. The conference was forlawyers
who represent relators (“relators” is the term that people
in the legal field use to describe “whistleblowers”) or the
government in False Claims Act or other qui tam lawsuits. The lawyers
who represent the relators bring lawsuits to try to recover the money
stolen from the Government, and in some cases the Government enters the
case as well. Since I am a lawyer who represents whistleblowers, I am
a member of the group that put on the conference, Taxpayers Against Fraud (TAF).
In my last legal blog entry I started describing one of the TAF conference
sessions where we discussed just a few of the different ways that people
try to defraud the federal Government. I decided that to keep my blog
posts to a manageable length, I would have to divide the list up into
a series of blog posts. So with no further ado, here are yet more of the
devious ways people have come up with to cheat the Government out of money:
* Submitting false and fraudulent applications for Government grants. Unfortunately,
several of our country’s finest universities have submitted false
applications for research grants, often in the medical or engineering
fields. I was particularly shocked when Weill Medical College at Cornell
University agreed to a $2.6 million settlement to resolve allegations
that it had defrauded the government when it applied for federal research
grants from the National Institutes of Health (NIH) and the Department
of Defense (DOD).
* Submitting a false application for a Government loan. These cases often
involve companies that know they are ineligible for a Small Business Association
(SBA) loan, so they falsify the information on the SBA loan application
and get the loan based on that false information. To its credit, the SBA
has recently begun to pursue this sort of fraud very seriously. Some businesses
have been accused of fraudulently obtaining loans from the federal aid
offered in the aftermath of Katrina. Individuals also may obtain disaster
aid loans or student aid loans based on false information, but the Government
generally is not interested in pursuing those cases as FCA lawsuits because
of the low dollar amount lost by the Government. In my experience the
Government is more likely to pursue that type of fraud criminally.
* Requesting payment for services or goods that are defective, or that
are of a lesser quality than the contractor agreed to provide. For example,
a manufacturer might provide bullet-proof vests to a Federal agency, knowing
that the vests are thinner than what the manufacturer agreed to produce.
The sheer number and breadth of the ways that people have devised to commit
fraud is truly astonishing. If our country could harness the creativity
that these folks waste on ways to commit fraud, and use it constructively
to create real business opportunities, we could emerge from our current
economic funk in no time at all.