TYPES OF GOODS AND SERVICES FRAUD
Agricultural Subsidies
The False Claims Act applies to any false representation or fraudulent scheme to obtain agricultural subsidies or funds from other agricultural programs.
Customs
Companies that undervalue their imports to lower the amount of customs duties or who underpay customs duties are liable under the False Claims Act.
Environmental Programs
The federal government spends a large amount of money to clean up toxic/hazardous waste. The government also requires contractors to follow all environmental laws. If a contractor intentionally overcharges the government for waste clean-up, gets paid for work it doesn’t do, or doesn’t meet government specifications, they are liable under the False Claims Act.
Improper Cost Allocation
If a company has government contracts and private commercial contracts, they are required to allocate their costs fairly among the different jobs. The problem arises when these contractors charge more to the government than to the private commercial accounts.
This lets the contractor quote lower prices to its private customers without having to take the losses for the price cuts because they are charging its government accounts just enough more to cover the costs.
Loan Guarantees
If a government loan is not repaid and it was obtained through fraudulent claims, then the company or individual loaned the money is liable under the False Claims Act.
Public Works Projects/Government Construction
If a contractor overcharges, rigs its bids to the government, fails to follow project specifications, or fails to report construction defects, the individual or company is liable under the False Claims Act.
Research Programs
If a grant recipient uses a federal research grant to pay for salaries, for another research project, or bills the government for services already paid for by another source, the recipient is liable under the False Claims Act.
Underpayment of Royalties on Government-leased Land
Oil, gas, and lumber companies who obtain/produce their materials on federal and Indian lands are governed by lease agreements between the Interior Department and private companies. According to law, the private companies must pay the federal government and Indian tribes a percentage of the oil, gas, and lumber value as a royalty. Any company who undervalues the oil, gas, or lumber it extracts in order to pay a smaller royalty, is liable under the False Claims Act.
Yield Burning
Yield Burning is when investment banking firms, in an effort to lower their borrowing costs, charge undue prices for U.S. Treasury securities sold to municipalities in connection with certain types of tax-exempt bond refinancing. These excessive prices artificially reduce the yield on the securities. Investment banking firms who overcharge in order to reduce yield are liable under the False Claims Act.
If you have been witness to these or any other activities that could be considered illegal under the False Claims Act, contact Halunen & Associates.