Is There a Penalty for False Claims In California ?

In 1987, the California Legislature enacted the False Claims Act, patterned on a similar federal statutory scheme (31 U.S.C. 3729 et seq.), to supplement governmental efforts to identify and prosecute fraudulent claims made against state and local governmental entities. (See Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 1441 (1987-1988 Reg. Sess.) as amended Sept. 8, 1987, p. 5.) The False Claims Act permits the recovery of civil penalties and treble damages from any person who "knowingly presents or causes to be presented to the state or any political subdivision . . . a false claim for payment or approval." ( 12651, subd. (a)(1).) To be liable under the False Claims Act, a person must have actual knowledge of the information, act in deliberate ignorance of the truth or falsity of the information, and/or act in reckless disregard of the truth or falsity of the information. ( 12650, subd. (b)(2).) The False Claims Act authorizes the Attorney General (in the case of alleged violations involving state funds) or the prosecuting authority of a political subdivision (in the case of alleged violations relating to funds of the political subdivision) to bring a civil action for violations of its provisions. ( 12652, subds. (a), (b).) Subject to certain limitations, the False Claims Act permits a private person (referred to as a "qui tam plaintiff" or a "relator") to bring such an action on behalf of a governmental agency. ( 12652, subds. (c)(1), (d).) If a qui tam plaintiff files a False Claims Act complaint, he or she must file the complaint under seal and serve it, as well as a written disclosure of the material evidence and information in support of his or her claims, on the Attorney General. ( 12652, subd. (c)(3).) The Attorney General is required to notify local prosecuting authorities if local funds are involved. ( 12652, subd. (c)(7), (8).) the action remains sealed for "up to 60 days" (although the statutory period is subject to extension for good cause shown) to permit the state and/or local authorities to investigate and determine whether to proceed in the action. ( 12652, subd. (c)(8)(D).) If the state and/or a local prosecuting authority elects to proceed with the action, that agency (or those agencies) have the primary responsibility for prosecuting the action, although the qui tam plaintiff has the right to continue as a party to the action. ( 12652, subd. (e)(1).) If no prosecuting authority decides to proceed with the action, the qui tam plaintiff has the right to do so subject to the right of the state or political subdivision to intervene in certain circumstances. ( 12652, subds. (c)(8)(D)(iii) & (f).) Regardless of who prosecutes the qui tam action, if it is successful, the qui tam plaintiff is entitled to a percentage of the recovery achieved in the case. ( 12652, subd. (g)(2)-(5).)