The US Department of Justice has raised the minimum and maximum penalties that can be assessed for violations of the False Claims Act, as well as civil monetary penalties under other laws, as part of a regular adjustment of those fines for inflation.
Civil penalties for False Claims Act violations are between a minimum of $13,508 and a maximum of $27,018 per violation occurring after Nov. 2, 2015 and assessed after January 30, 2023, when the new penalties were adopted.
Prior to this adjustment, False Claims Act violations carried a minimum $12,537 and a maximum $25,076 penalty for violations occurring after Nov. 2, 2015 and assessed after May 9, 2022. For violations prior to 2015, penalties were a minimum of $5,500 and a maximum of $11,000, if they occurred after enactment of the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990.
DOJ filed notice of the new minimum and maximum False Claims Act penalties in the Federal Register on January 30, 2023. The changes were made in accordance with the Bipartisan Budget Act of 2015 (BBA).
That law revised the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990 and changed the formula for calculating annual inflation adjustments. The adjusted penalties apply only to violations occurring after the enactment of the BBA.
DOJ did not adjust the penalties in 2019. Prior to that, DOJ made adjustments in 2016 and 2017, as reflected in the table accompanying DOJ’s notice.
Under the False Claims Act, individuals, companies and other entities that defraud the government are liable for as much as three times the damages caused by their fraud plus penalties for each violation.
The penalties are an important component of the False Claims Act, which seeks to deter fraud against the government by making sure that the cost of getting caught is more than the benefit from engaging in the fraudulent conduct.