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Government Agencies Weigh Using False Claims Law against Banks
By Matt Squire
printBanks that improperly handle government money, including bailout funds and taxes, could increasingly receive hefty fines under a law rarely evoked today in the financial sector, say legal experts. The False Claims Act (FCA), which dates to the Civil War, allows federal lawyers to sue for damages against companies that fraudulently use government payments for contracted work. The U.S. Justice Department has used the law, primarily against defense contractors and healthcare providers, to collect over $21 billion since 1986. How the government leverages that power is likely to change, as lawmakers and prosecutors eye troubled financial institutions that have dipped...
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