False Claims Act (“FCA”) penalties will double. Last week, the Department of Justice announced that an obscure agency dubbed the Railroad Retirement Board updated FCA penalties as prescribed by Congress. Under the rule, minimum per-claim penalties will jump to $10,781 from $5,500, and maximum per-claim penalties will rise to $21,563 from $11,000. The development has been expected since May.
The DOJ may choose to pursue a smaller penalty if the full amount due under the FCA will produce “a negative economic impact.” In an unusually terse statement, the DOJ said, without explanation, that it “is not invoking that authority in this rule.” The increase takes effect Aug. 1 and applies to violations after Nov. 2, 2015.
Last week’s regulation also updated penalties in more than 50 other categories affecting a wide range of enterprises. Fines under the Financial Institutions Reform, Recovery and Enforcement Act will soar to $9.5 million from $5.5 million, and penalties related to improper disclosure of bids on government contracts would boost to $1 million from $500,000.