DOJ Issues Interim Final Rule Increasing False Claims Act Penalties.

The United States Department of Justice (DOJ) recently published an interim final rule adjusting certain civil monetary penalties (CMPs) for inflation.  Prior amendments to the Inflation Adjustment Act require agencies to (1) periodically evaluate and adjust CMPs within their jurisdiction for inflation; and (2) issue regulations adjusting the CMPs for publication in the Federal Register.  Section 701 of the Bipartisan Budget Act of 2015 further amends the Inflation Adjustment Act to set forth a revised statutory formula for annually calculating inflation adjustments for CMPs.  The adjustments are based on the Bureau of Labor Statistics’ Consumer Price Index for October 2015.

Significantly, the DOJ interim final rule nearly doubles the civil penalties for False Claims Act (FCA) violations.  The minimum penalty will increase from $5,500 to $10,781 per claim, while the maximum penalty will increase from $11,000 to $21,563 per claim.  The adjusted CMP amounts, including the increased FCA penalties, will apply to penalties assessed after August 1, 2016 for violations occurring after November 2, 2015.

The DOJ will accept public comment on the interim final rule until August 1, 2016.

The interim final rule is available at:

https://www.gpo.gov/fdsys/pkg/FR-2016-06-30/pdf/2016-15528.pdf.

Civil Monetary Penalties Inflation Adjustment; Interim Final Rule with Comment Period; 81 Fed. Reg. 42491-42503 (June 30, 2016).