Congress requires federal agencies to adjust civil money penalties each year to keep pace with inflation. Under that authority, this year DOJ increased the civil penalties for False Claims Act violations to a minimum of $13,946 per violation and a maximum of $27,894, per violation. The new amounts apply to FCA penalties assessed after February 12, 2024 for violations occurring after November 2, 2015.
The FCA itself provides for penalties of between $5,000 and $10,000, but starting in 1990, Congress required agencies to adjust civil penalties every four years. At that time, DOJ adjusted the FCA penalties to a minimum of $5,500 and a maximum of $11,000. Subsequently, in 2015 Congress required an initial catch up adjustment and annual adjustments. As a result, for violations before November 2, 2015, when the annual adjustment requirement was imposed, penalties under the FCA are a minimum of $5,500 and a maximum of $11,000 per violation. For violations after that date, the applicable penalty depends on the date a court assesses the penalties:
Minimum and Maximum Penalties for False Claims Act Violations Occurring After November 2, 2015
| Penalty assessed after 12/13/2021 | Penalty assessed after 5/9/2022 | Penalty assessed after 1/30/2023 | Penalty assessed after 2/12/2024 |
| Min: $11,803
Max: $23,607 |
Min: $12,537
Max: $25,076 |
Min: $13,508
Max: $27,018 |
Min: $13,946
Max: $27,894 |
See 28 CFR § 85.5.
U.S. ex rel. Holsey v. Elite Healthcare Enterprises, Inc., No. 1:18-CV-2318-JPB, 2023 WL 1993781 (N.D. Ga. Feb. 13, 2023), a case concerning Medicaid fraud, illustrates how the inflation-adjusted civil penalties apply. That case involved both violations that occurred before November 2, 2015 and violations that occurred after that date. The Court awarded the minimum civil penalty for five false claims occurring before November 2, 2015, at $5,500 per false claim, for a total of $27,500. The Court awarded the minimum civil penalty of $13,508 for 500 false claims that occurred after November 2, 2015. The Court acknowledged that at the time the Government submitted its Motion for Default Judgment, the minimum FCA civil penalty per claim for post-2015 claims was $11,665. However, the minimum civil penalty for such violations was increased to $13,508 on January 30, 2023. Therefore, because the Court assessed the penalties in February 2023, the Court applied the minimum for penalties assessed after January 30, 2023.
False Claims Act penalties play an important role in deterring fraud and ensuring that the government recovers for the often immeasurable costs of fraud. Congress’s decision to ensure that penalty amounts keep up with inflation is important for maintaining the effectiveness of the False Claims Act penalties.
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