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During the American Civil War, President Lincoln realized that a lot of the
government contractors were defrauding the federal government.
It happened a lot of ways, for example some of the contractors were selling
warhorses to Union Army and what they found was instead of horses are really
donkeys and mules.
It happen in another ways, for example they were taking gunpowder and putting
sawdust in it. The contractors were selling
these the kegs of supposedly gunpowder,
which were not in fact really gunpowder. It had been cut with the sawdust.
happened
they're cutting a sugar with sand and there are other examples too... And got so
bad that Congress passed
the False Claims Act. This was really historic legislation because what it
provided for the first time was that
if a government whistleblower, someone who knew about the fraud
an insider, who knew for example, that someone was ripping off the government
by
supplying bad sugar that have been cut with sand or
donkeys and mules for warhorses, that if the government then took that claim
and prosecuted and recovered an amount of money for
the government to compensate for the false claim that, in fact, the person who
reported
the whistleblower, could get a reward. And could actually get
a percentage of the amount recovered by the government.
It was one of the most successful programs
in history United States. Since it was first enacted in the Civil War
it became amended over time. It was first amended in the twenties and then later...
Most recently in the 1980's, when there was a lot of,
again, government contract fraud it was widely reported in
in the newspapers and in the modern Press they really put more teeth in it
and provided that was a little bit easier for some these whistleblowers to
receive awards, when they really had inside information about fraud...
and since that time there have been literally billions, billions upon
billions of dollars have been recovered by the federal government
for false claims. It's been incredibly successful program and
the whistleblowers, who've reported the false claims, have been very handsomely
rewarded.