New Mexico has passed a targeted Medicaid False Claims Act and a more general Fraud against Taxpayers Act. Both of these acts borrow heavily from the federal FCA. Whistleblowers with knowledge of fraud on New Mexico Medicaid funds may bring suit on behalf of New Mexico and share in the recovery. Under N.M.S.A. §§ 27-14-4 and 44-9-3, an individual may face civil liability for knowingly presenting or causing to be presented a false or fraudulent claim, conspiring to do so, or engaging in other fraudulent activity as specified by law. Violation of the New Mexico Medicaid False Claims Act exposes an individual to civil penalties up to treble damages, or three times the total damages to the state. Further, a violation of the New Mexico Fraud against Taxpayers Act imposes an additional penalty of between $5,000 and $10,000 for each individual violation of the Act.
The state’s Medicaid False Claims Act specifies that proceeds, in addition to the state’s legal fees and investigatory costs, will be remitted to the state’s general revenue fund to be used for the state’s Medicaid program and for whatever expenses the Attorney General deems necessary. The state’s Fraud against Taxpayers Act requires all civil penalties be deposited in a school fund, and that all other monies recovered be returned to the fund from which they came. Then, half of those funds are sent to the Attorney General for use in prosecuting other state FCA claims and the other half is returned to the state’s general revenue fund.
A private individual with direct knowledge of a New Mexico False Claims Act violation is authorized by the statute’s qui tam provision to bring a lawsuit against an individual or business. The relator, often referred to as a “whistleblower,” must file this lawsuit within four years of the alleged violation and may proceed with the action regardless of whether the government chooses to intervene. Both New Mexico fraud statutes contain provisions to protect whistleblowers and to reward them up to 25% for bringing such cases when the government intervenes, and up to 30% when it declines to intervene.
In September 2013, Chevron Corp. agreed to pay New Mexico $5.2 million to resolve claims that it violated the New Mexico Fraud against Taxpayers Act when it received millions from the state from a contract in which the company was supposed to clean up petroleum contamination from Chevron’s own leaking underground storage tanks at various gas stations all around the state. Allegedly, Chevron falsified records on applications for the cleanup job by stating that it did not have outside insurance to pay for the costs of cleaning up the underground tanks. In fact, Chevron did recover hundreds of millions of dollars from outside insurers through secret settlements that should have been disclosed to the state. New Mexico had paid Chevron roughly $4 million for the project, a cost which should have been much lower had the company disclosed its outside insurance coverage.