Court sets limits in government fraud suits

[Lone_Star_Dem]

Source: The Seattle Times

WASHINGTON —

The Supreme Court ruled unanimously Monday that a whistleblower law intended to expose fraud can be applied to subcontractors and other indirect recipients of federal funds.

The case before the court involved alleged contract fraud by a former unit of General Motors Corp. At issue was whether the False Claims Act covers any fraudulent claim paid for by government funds, or only fraudulent claims directly submitted to a government official.

Justice Samuel Alito charted a middle path, saying the law can be used if fraudulent statements are ultimately intended to get the government to pay claims.

The whistleblower law does not apply in situations in which a subcontractor does not intend the government to rely on a fraudulent claim as a condition of payment

Read more: http://seattletimes.nwsource.com/html/politics/2004466542_apscotuswhistleblowers.html?syndication=rss

[Joanne98]

1. I can't tell if this is good or bad.

[Sanity Claws]

2. It sounds positive

Apparently the defendants were arguing that this kind of suit can only be used as an entity that has a government contract directly. However, general contractors often sub out part of the contract. Now these subcontractors can be sued.