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What is actually 'worthless' under the FCA?

One of the key questions in qui tam cases is whether the services the federal government was billed for were “worthless.” Essentially, the question examines whether the entity at issue provided services that were worth less than they should have cost, or whether they had no value whatsoever. This is a question that has vexed a number of appeals courts that have grappled with qui tam cases involving a worthless services theory.

Several Courts of Appeals, including the Sixth, Second, Eighth and Ninth Circuits, have held that a plaintiff in these cases could prove a False Claims Act violation if the products or services the defendant was reimbursed for had a value equal to zero. However, other circuits may not follow this reasoning. 

This type of confusion may wind up being an issue that is to be resolved by the Supreme Court. The high court commonly accepts cases where there is a difference of opinion among appellate courts. However, it is uncertain as to whether a case will come about that is ripe enough for the Court to step in.

In the meantime, whistleblowers who believe that their employers are defrauding the government need not worry about how the difference between “worthless” and “worth less” will be viewed by the court. Instead, speaking with an experienced attorney about what they know and information that could help prove fraud should be the things that can help them garner piece of mind about whey they are doing. 

The preceding is not legal advice. 

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