The Expansive And Expanding New York False Claims Act

Empowering & Rewarding “Whistleblowers” to Sue On Behalf of New York State & Local Governments

Private Lawsuits for Tax Fraud & Fraud In Connection 

With NY Infrastructure Spending, Covid-Relief, Health Care Fraud & More

The New York False Claims Act (“NYFCA”) has revolutionized how New York detects and stops fraud against the government by individuals and corporations. Like the United States False Claims Act, it empowers whistleblowers and others to sue companies and individuals for committing a fraud against the government in exchange for a percentage of the proceeds. (These are so-called “qui tam” suits).

Even seasoned False Claims Act practitioners may be surprised to learn that New York’s False Claims Act contains many unique provisions that go beyond it’s federal counterpart to facilitate “qui tam” actions and hold liable parties accountable, including: 

•    a lower pleading standard for private “qui tam” plaintiffs; 

•    allowing whistleblowers to disregard corporate confidentiality agreements; 

•    a more generous provision allowing qui tams based on publicly disclosed information

•    a longer statute of limitations;

•    higher damages; and 

•    a more robust anti-retaliation provision.

The NYFCA has gained particular notoriety because, unlike the federal version, it applies to tax frauds. Indeed, the NYFCA can be used against large taxpayers, but also tax consultants, accountants, and other businesses that (allegedly) facilitate tax frauds.

Having resulted in the recovery of approximately $600 million in tax frauds alone since 2011 (recoveries mostly obtained by whistleblower initiated lawsuits), the New York legislature passed legislation in 2021 to expand the NYFCA even further. If signed by Governor Hochul, the legislation will apply the NYFCA to tax frauds even when there is no “false record” or “false statement” used by the taxpayer.

Given an expansion in government spending, from COVID-19 relief to infrastructure plans, and recent multi-million dollar NYFCA lawsuits and settlements against health care companies, hedge funds, art galleries (and their principals), we are pleased to offer a CLE on the NYFCA, its recent applications, and the potential impact of legislation to expand the Act further.

Teaching the class is Gregory M. Krakower, who authored the 2010 and 2013 amendments to the NYFCA and was responsible for implementing the Act when he served as Senior Advisor & Counselor to the New York Attorney General from 2011-2016. Mr. Krakower has taught courses on whistleblower law and False Claims Acts at Cardozo Law School and Cornell Law School.