&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
------- |