Massachusetts False Claims Act
The Massachusetts False Claims Act was first enacted in 2000. Under Mass. Gen. Laws c. 12, §§ 5B of the Act, the Attorney General is empowered to sue individuals and companies that submit false claims for payment to the state government or its political subdivisions (including cities and towns). The Public Protection and Advocacy Bureau in the Attorney General’s Office enforces the state False Claims Act.
Violation of the Massachusetts False Claims Act exposes an individual to civil penalties up to three times the total damages to the state. Furthermore, the Act imposes civil penalties ranging from $5,000 to $10,000 for each individual false claim in violation of the Act. In addition to civil penalties and treble damages, state FCA violators are also liable to the commonwealth or any of its political subdivisions for reasonably attorney’s fees, reasonable expert’s fees, and the costs of investigating the false claims. These proceeds are deposited into a “False Claims Prosecution Fund.” See Mass. Gen. Laws ch. 12, §§ 5H, 5I.
A disclosure to the Massachusetts state government pursuant to Mass. Gen. Laws c. 12, §§ 5A and 5G(3) may preserve a person’s rights as an original source of the information about fraud. Whistleblowers involved in successful judgments or settlements may receive up to 25 percent of the civil penalties recovered by the state government. If the state government has chosen not to intervene, the whistleblower may receive up to 30 percent of the available recovery. Additionally, the Act provides the whistleblower with protection against employer retaliation, offering reinstatement, double back pay and benefits with interest, and compensation for any special damages including attorneys’ fees if the employee disclosures information to the government or otherwise acts in furtherance of an investigation or action under the statute.
In 2012, the Massachusetts legislature amended the state FCA to reflect changes made to the federal FCA in 2009 and 2010. On July 31, 2013, the Office of Inspector General (“OIG”) determined that the amended version of Massachusetts’s false claims act met the new standards of the federal FCA. As such, the state will continue to receive a 10% bonus to all federal FCA recoveries related to the Medicaid program.
Massachusetts has benefitted greatly from its imposition of a False Claims Act. In 2011 alone, Attorney General Martha Coakley returned more than $40 million to the state treasury, up from $14.4 million in 2010. To put that into perspective, the total FY 11 budget for the AG’s office was roughly $37 million. Some of the more notable recoveries secured by the state include:
$2.65 million recovered as part of a settlement with CVS/pharmacy in August 2010 after investigators determined that the pharmacy chain abused the insurance compensation system by overbilling public entities for prescription medications.
$7.5 million returned to the state after the operator of three municipal waste incinerators settle false claims including an allegation that it violating the Hazard Waste Management Act, the Clean Water Act, and the Wetlands Protection Act multiple times. Much of this money was forwarded to individual cities and towns.
As a result of the financial crisis, Massachusetts prosecutors won $23 million for the state pension fund and $10 for the general fund from Morgan Stanley after the investment bank sold toxic subprime mortgage loans to investors.
- 1 Free Consultation
- 2 Over 20 Years Experience
- 3 Serving Nationwide
Fill out the contact form or call us at 855.809.9119 to schedule your free consultation.