New Amendments to New York False Claims Act

On August 16, 2010, New York Governor David A. Paterson signed into law legislation strengthening New York’s False Claims Act.  The New York False Claims Act allows individuals to bring civil actions (“qui tam”) on behalf of the state to recover fraudulent payments and overpayments made to third-party suppliers of goods and services.  The state may choose to intervene in such an action or allow the action to proceed as a private suit.  The new legislation permits “qui tam” plaintiffs to bring actions for tax fraud, but only when the net income or sales of the defendant total $1 million or more and the damages pleaded in the action exceed $350,000.  Moreover, the legislation strengthens the protections for whistle-blowers who recover information concerning the misuse of government funds.  The value of these recoveries to New York State is estimated at over $20 million each year.

The President of the New York State Bar Association, Stephen P. Younger, commended Governor Paterson by stating, “This legislation strengthens the existing New York False Claims Act by enhancing the state’s ability to obtain financial recovery for losses suffered due to fraud perpetrated by contractors and others against the government.”  President Younger continued, “The state bar and its Commercial and Federal Litigation section have long been supporters of the New York False Claims Act.  I want to commend the Governor and the State Legislature for making these much-needed enhancements to further protect the interests of all New Yorkers.”

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