The Georgia Taxpayer Protection False Claims Act, which becomes effective on July 1, 2012, is a far-reaching law that imposes civil penalties for knowingly submitting false claims to Georgia state and local governments, including counties, state departments and agencies, boards, commissions and other public entities. The False Claims Act applies to any person, firm, corporation or legal entity that requests or demands money or property from the state or any local government. Businesses should have procedures in place to ensure that pay requests contain no known falsities.
The statute makes it unlawful to knowingly present false or fraudulent claims to receive money or property from state or local governments. No proof of specific intent to defraud is required, and a person need not even have actual knowledge of the falsity to be found in violation of the statue. Civil penalties for violations range from $5,500 to $11,000 for each false claim, plus three times the amount of damages sustained by the government as a result of the false claim. The statute provides some relief if the court finds that: (1) the person committing the violation provided all information to the authorities within 30 days after the date he obtained the information; (2) the person fully cooperated with the investigation; (3) no criminal prosecution or civil or administrative act was commenced; and (4) the person had no actual knowledge of an ongoing investigation. If these circumstances exist, the violator will be assessed not more than two times the amount of actual damages, in addition to the penalty itself.
The Attorney General is empowered to investigate violations of the statute or delegate such authority to a district attorney or other local official. Civil actions must be brought within six (6) years after the date the violation was committed or three (3) years after the date the facts material to the right of action were known or should have been known; however, no action may be brought more than ten (10) years after the date of violation. Once an action is brought, it may only be dismissed with the Attorney General’s written consent.
Private persons may bring civil actions with the written permission of the Attorney General. The statute allows private persons to recover up to 30 percent of the amount obtained from the violating party, plus reasonable attorney’s fees and litigation expenses. The amount a private person may recover depends on the person’s role in advancing the litigation and the circumstances of the violation.
The Act protects persons from retaliation for making efforts to stop violations of the Act by providing relief for discrimination in the form of reinstatement, back pay, interest, and reasonable attorney’s fees and litigation costs. Targets of frivolous or vexatious False Claims Act assertions may, in some instances, recover reasonable attorney’s fees and expenses.
Given the onerous damages and the absence of fraud requirement, businesses are advised to have procedures in place with checks and balances to ensure that pay requests are reviewed for accuracy.