A government audit or investigation often starts with a simple records request. What many people do not realize is how quickly that request can turn into something more serious.
The government understands this; thus, they put the False Claims Act (FCA) in place. This law serves as a powerful legal tool that punishes people or companies that cheat government programs. In California, two versions of this law exist: the federal FCA and the California False Claims Act. While these laws help the government recover stolen money, they operate as civil laws.
How civil cases and criminal cases differ
It is important to understand that civil lawsuits and criminal cases are separate. In a civil FCA case, the government seeks to recover funds and impose fines. You do not go to jail for a civil violation. However, the same actions that lead to a civil lawsuit can also lead to separate criminal charges under different laws, such as the California Penal Code § 72.
In a civil case, the government only needs to prove that a person knowingly submitted a false claim. This can include acting with reckless disregard for the truth. Criminal cases are much harder to prove. To secure a criminal conviction, a prosecutor must prove that a person had a specific intent to defraud.
Why some industries face more risk
In California, regulators monitor certain businesses more closely because they receive substantial government funding. These include:
- Health care: Billing for services that were never provided
- Defense contracting: Overcharging for equipment or materials
- Technology: Misusing government grants for research
When a whistleblower reports fraud, investigators review internal emails and billing records. If they find evidence that someone planned the fraud, they may ask a District Attorney to start a criminal case while the civil case is still ongoing.
Why early legal help matters
An investigation can move very quickly. Because civil and criminal cases can occur simultaneously, it is vital to speak with a lawyer early. A legal expert can help you understand your rights and ensure you respond to investigators in a way that protects you. Making the right decisions early on can help prevent a financial dispute from turning into a much more serious legal problem.