Falsifying Government Claims and Insider Trading

Fraudsters are still skittering out of the woodwork to get their share of U.S. stimulus money. However, the federal government is hitting back vigorously. Here is how to protect your organizations and clients from government claim fraud and insider trading.

Excerpted and adapted from Chapter 5 of "Managing the Risk of Fraud and Misconduct: Meeting the Challenges of a Global, Regulated, and Digital Environment," by Richard H. Girgenti, J.D., and Timothy P. Hedley, Ph.D., copyright 2011 McGraw Hill. Additional contributors to this chapter are Graham J. Murphy, Amanda Rigby and Nimna Varghese.

The U.S. False Claims Act (FCA) — enacted in March 1863 to battle abuses of federal contractors during the Civil War — is a primary weapon aimed at helping stem the tide of false claims by government vendors. In 2010 alone, the U.S. government recovered more than $3.1 billion from organizations and individuals that prosecutors say had filed false claims for services or products.