The FCA was enacted to combat fraud against the federal government. Until recently, relators — whistleblowers suing on behalf of the government — usually sued under subsection (1) of the statute, which imposes liability on any person who knowingly “presents, or causes to be presented” a false or fraudulent claim to the United States. But in recent years, many relators have attempted to broaden the reach of the act by bringing their claims under subsection (2), which imposes liability on any person who knowingly uses a “false record or statement to get a false or fraudulent claim paid or approved by the Government.”
Relators have also used subsection (3), which imposes liability on any person who “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.” Relators argue that under these two provisions a defendant is liable for false claims made to a private entity, as long as the entity used government funds to pay the claim. Under this interpretation, many unsuspecting companies who have never done business with the federal government would be subject to the FCA. For example, the statute would apply to a vendor who submits a false invoice to a university, because almost all universities receive federal funding.
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