The North Carolina False Claims Act

Protecting Whistleblowers Across The State

Generally speaking, a whistleblower is an “insider” in a company (or sometimes a government agency) who uncovers fraud, waste, abuse, or corruption in the company and then discloses that wrongful conduct to someone capable of remedying the behaviors at issue. At Miller Law, we work with whistleblowers who know about fraud against the North Carolina government, helping them bring their knowledge to the attention of the government regulators who can act against it.

The mechanism for this work is the U.S. False Claims Act, a law dating back to the Civil War that protects whistleblowers from retaliation for reporting what they know and allows them to collect part of the government’s recovery. But fraud is also perpetrated against states, and a lot of fraud against the state goes unreported.

This is why, in 2009, North Carolina passed the North Carolina False Claims Act (NC FCA). It was modeled after the federal False Claims Act (FCA) and largely mirrors the federal FCA. (This is a good thing for someone who wishes to report fraud committed against both the State of North Carolina and the United States Government!)

Broadly speaking, the NC FCA allows individuals who know about fraud against the state government or a local government to bring a lawsuit on behalf of the state or local government. (As with a whistleblower suit under the U.S. FCA, this individual is known as a “relator,” and the lawsuit itself is referred to as a “qui tam” suit.)

The NC FCA also makes it possible for North Carolina to recover funds lost due to a nationwide scheme. In other words, North Carolina can work together with the federal government to recover funds it lost as part of a scheme that also affected the federal government or other states.

Understanding the NC FCA

Defining Its Structure and Limitations

While the NC FCA is broadly similar to its federal counterpart, the NC FCA does have some restrictions that the federal FCA does not. For example, under the NC FCA, state employees may not bring suit if they gained their information through their employment with the state. (This does not, however, prevent a state employee from filing a case under the US FCA if the employee has information about a federal law being violated.) The federal FCA has no similar restriction.

The NC FCA also has a six-year statute of limitations. In other words, claims made for fraud that occurred more than six years in the past are not valid.

Violations of the NC FCA are defined as submissions to the government of false claims for payment. The most common kinds of fraud involve Medicaid and other healthcare programs, but any time the state government pays out money, the NC FCA can be used to combat fraud. A violation can incur penalties between $5,500 and $11,000 per fraudulent claim. Those who profit from false claims can also be required to repay the government as much as three times the amount of its damages, as well as the whistleblower’s attorneys’ fees and costs.

Successful relators may receive anywhere from 15% to 30% of the government’s full recovery, plus attorneys’ fees and costs. Furthermore, the NC FCA protects whistleblowers from retaliation by employers and provides for additional penalties when employers attempt to demote, fire, harass, or threaten whistleblowers — those penalties can run to two times back pay with interest as well as money damages, and costs and attorneys’ fees.

To read the entire NC FCA, click here.

Filing A Claim?

Make Sure You Have A Team Who Can Support You

If you think that you have a claim under the False Claims Act, contact an experienced attorney from Miller Law Group for a free consultation as soon as possible.