Impact of New Fraud Enforcement and Recovery Act of 2009

Foley Partner Cheryl Wagonhurst is speaking on a Society of Corporate Compliance and Ethics (SCCE) Web conference on the "Impact of New Fraud Enforcement and Recovery Act of 2009 (FERA)," June 26, 2009 from 12:00 p.m. - 1:30 p.m. CT with James Sheeder, Partner at Jones Day.

Significant new amendments to the Federal False Claims Act (FCA) are included in the newly passed Fraud Enforcement and Recovery Act of 2009 (FERA). FERA is intended to bolster the federal government’s ability to investigate and prosecute financial fraud, especially any misuse of government stimulus and Troubled Asset Relief Program (“TARP”) funds.

FERA increases funding for federal financial fraud enforcement and amends sections of the United States Criminal Code related to fraud against the government. FERA also expands liability under the FCA, 31 U.S.C. § 3729, which imposes liability on those who make false statements or claims for reimbursement to the government.

FERA expands the scope of liability under the FCA to include:

• anyone who makes a false statement or claim to virtually any recipient of federal funds; and
• anyone who knowingly retains a government overpayment without regard to whether or not that entity used a false statement or claim to do so.

FERA’s changes also:

• expressly repudiate current FCA case law and impose liability for all false claims paid using government funds.
• expand the right of action for retaliation under the FCA.

The new law effectively expands the statute of limitations under the FCA by creating an FCA-specific relation-back doctrine.