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Defense contractors, transportation companies, hospitals and nursing homes, and other private companies who contract with the Government are paid trillions of dollars a year for their products and services. With that much money available, the potential for fraud is unfortunately rampant. Contractor fraud, including nursing home and Medicare fraud, have cost taxpayers billions of dollars. Examples include false or inflated billings, the production and delivery of inferior products, incentives paid by drug companies to doctors and HMOs, and bid rigging or price fixing on contracts with the government.
In an effort to prevent this fraud, Congress passed the False Claims Act, which provides legal rights to people who blow the whistle on fraud on the government. The False Claims Act states that whistle-blowers will be awarded a percentage (15 to 30 percent) of the money recovered from the guilty company, even if the whistleblower participated in the guilty conduct. This provision is designed to encourage people who come forward despite the effects whistle blowing could have on their jobs and personal lives. In addition, in many of the cases, the whistleblower has the blessing and support of the U.S. Government, which can serve as the lead party in the case.
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