&EPA Committee on Integrity and Management Improvement Bulletin 94-1 EPA 350-F-93-003 December 1993 Program Fraud Civil Remedies Act This Awareness Bulletin highlights the Program Fraud Civil Remedies Act (PFCRA), 31 U.S.C. 3801-3812, which provides EPA and other Federal agencies with an alternative legal remedy to deter fraud resulting from false claims and false statements. Under PFCRA, EPA can bring administrative actions to recover damages and civil penalties for small dollar frauds when the Department of Justice (DOJ) approves. It is important for all EPA employees to be aware of this law and how it can be used. Background Before the enactment of PFCRA, the only remedies available to agencies were civil action for false claims under the False Claims Act and criminal prosecution for false claims and false statements under the Federal criminal code. If the amount of fraud was small, Federal prosecutors sometimes decided not to bring a criminal or civil action. Now, agencies can initiate their own administrative actions to prosecute relatively small false claims (up to $150,000 per claim) and false statements after obtaining DOJ approval. What Is PFCRA? PFCRA is sometimes called the "mini-False Claims Act." It was enacted on October 21,1986, to establish an administrative procedure that Federal agencies can use against any person who makes a claim or statement to an agency, which the person knows or has reason to know is false, fictitious, or fraudulent. A person found liable in an administrative action under PFCRA may be penalized up to $5,000 per false claim or false statement, and may be required to pay an assessment of up to double the amount falsely claimed. Who Is Liable? Any person (including an individual, partnership, corporation, association, or private organization) who knowingly submits a false, fictitious, or fraudulent claim or written false statement to a Federal agency (or to any recipient of money, property, or services from a Federal agency) is liable for civil penalties and assessments. What Is a False Claim? A false claim is any false, fictitious, or fraudulent claim for property, services, money, grants, loans, insurance, or benefits. It does not matter whether the claim was actually paid by an agency. What Is a False Statement? A false statement is any false, fictitious, or fraudulent written representation, certification, affirmation, document, record, or accounting or bookkeeping entry which is made with respect to a claim, contract, bid or proposal for a contract, grant, loan, or benefit and which is accompanied by an express certification or affirmation of the truthfulness and accuracy of its contents. A false statement is also an omission of a material fact when there is a duty to provide a fact with respect to a claim or a statement and the claim or statement becomes false, fictitious, or fraudulent due to the omission. What Is the Standard of Knowledge? A person must actually know that the claim or statement is false, or be deliberately ignorant of its truth or falsity, or act in reckless disregard of its truth or falsity. A specific intent to defraud is not required. How Does PFCRA Work? If the Inspector General, who is EPA's "investigating official," determines that action is warranted, he/she reports the findings and conclusions of the investigation to the Principal Deputy General Counsel, who is EPA's "reviewing official." If the reviewing official determines there is adequate evidence to believe that a person is liable, he/she refers the matter to DOJ for approval to bring a PFCRA action. The Attorney General, or his/her designee, has 90 days to approve or disapprove the issuance of an agency complaint. If DOJ approves, EPA's Office of General Counsel brings the case before an EPA Administrative Law Judge. PFCRA and EPA's implementing regulations provide elaborate procedural safeguards. The Agency has the burden of proving its case by a preponderance of the evidence (i.e., that it is more likely than ------- not that the person committed the alleged violation). Any person found liable for a civil penalty or assessment in an initial decision by an EPA Administrative Law Judge may appeal to the EPA Administrator and may subsequently seek judicial review in an appropriate United States District Court. Examples of PFCRA Violations Some actions that will subject persons to liability under PFCRA include the following examples, which are not intended to be all-inclusive: • An EPA employee knowingly submits a taxi voucher or travel voucher that contains false claims for lodging, transportation, long-distance telephone calls, or other expenses. • A contractor and/or subcontractor knowingly submits or causes to be submitted a falsified invoice to EPA associated with the cleanup of a hazardous waste site. An assistance recipient knowingly submits a request for reimbursement that includes amounts not actually spent by the assistance recipient on work covered by the assistance agreement. Conclusion PFCRA was enacted because Congress wanted to provide the Federal Government with an additional remedy to combat fraud. For this law to be effectively used in supporting EPA's important mission, however, employees must make continual efforts to detect and report fraud. If you know of or suspect any fraud, waste, abuse, or mismanagement at EPA or under any EPA-funded grant, cooperative agreement, contract, or subcontract, please contact the Office of Inspector General (OIG) in Headquarters or the nearest Divisional Office of Inspector General. A telephone hotline number to the OIG is also available: (202) 260-4977 or toll-free 1-800-424-4000. Information is confidential. As a step towards pollution prevention, one copy of this leaflet will be printed for every two employees. Therefore, employees are encouraged to share their copies. Recycled/Recyclable Primed with Soy/Canola Ink on paper thai contains at least 50% recycled fiber ------- |