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Colorado’s New False Claims Act: What it Means for Whistleblowers
Wednesday, September 21, 2022

On June 7, Colorado governor Jared Polis signed into law the amended Colorado False Claims Act. This new policy, also known as the CFCA, will significantly expand the reach of qui tam lawsuits and the power of whistleblowers in the state of Colorado.

If you have information about fraud involving government funds in Colorado, whether it falls in the realm of healthcaregovernment contractstax evasion, or more, contact a whistleblower lawyer today. Our team at Tycko & Zavareei LLP is ready to assist with the new kinds of claims made available by the expansion of the Colorado False Claims Act. Coming forward can reward Colorado whistleblowers with a percentage of the recovered funds, provide protection against employer retaliation, and protect taxpayer money.

The History Behind the Colorado False Claims Act

The Colorado False Claims Act was co-sponsored by Representative Matt Gray, Representative Mike Weissman, and Senator Faith Winter. Previously in Colorado, qui tam claims were limited to Medicaid fraud. While healthcare fraud is a significant source of misappropriated government funds, the expansion of the new CFCA will allow for other kinds of whistleblowers to come forward to recover taxpayer money.

The Colorado False Claims Act and the Federal False Claims Act

The Colorado False Claims Act is notably modeled after the federal False Claims Act, first passed by the Lincoln Administration during the American Civil War. The Act has been amended several times since then to allow whistleblowers to bring cases on behalf of the federal government in cases of fraud or misappropriation of funds.

According to the federal False Claims Act, whistleblowers (or “qui tam relators“) are now entitled to up to 30 percent of the government’s total recovery in the event of a successful qui tam case. Fraudsters, or those who knowingly make false claims against the government, can be held liable for up to treble damages in addition to individual financial penalties. These penalties are assessed at a rate that is linked to national inflation rates.

Because of the financial incentives and protections offered to whistleblowers, the False Claims Act was once described as “the most powerful tool the American people have to protect the government from fraud.” The Act has helped recover over $70 billion in misappropriated taxpayer funds. Consequently, whistleblowers have received over $8 billion in payouts due to the strength of the FCA.

New Details of the CFCA

Colorado now offers similar financial awards and incentives to whistleblowers in expanded areas of fraud. Qui tam cases can be brought in areas of fraud involving any kind of state or local government contract, in addition to healthcare claims. Similarly, Colorado whistleblowers are now eligible to receive up to 30 percent of the government’s total recoupment in the event of a successful qui tam case.

Currently, the Colorado law reads that “A person who makes a false claim is liable to the state or a political subdivision for a civil penalty of $11,800 to $23,600 per violation, plus 3 times the amount of the damages sustained by the state or political subdivision.” These financial penalties can add up quickly in cases of extensive or ongoing fraud. The higher the amount at stake, the larger a Colorado whistleblower’s reward can become.

Expanded Protections for Colorado Whistleblowers

The amendments made to the Colorado False Claims Act also allow for whistleblowers to receive further financial compensation, in addition to their initial award, in the event of discrimination or retaliation by their employers. The CFCA prohibits retaliation in the forms of:

  • Demotion

  • Suspension

  • Threats or harassment

  • Intimidation

  • Lawsuits

  • Defamation

  • Blacklisting

  • Reduction of pay or hours

  • Any other kind of discrimination as a result of a protected disclosure

If your Colorado employer has discriminated against you or terminated you for becoming a whistleblower, you may be able to sue for reinstatement as well as for twice the amount of back pay for the period during which you were wrongfully terminated. You may also be able to seek interest on the double back pay, other damages, as well as attorneys’ fees. Contact a whistleblower lawyer today to report discrimination or harassment by an employer and to ensure that you can pursue the full amount of financial compensation that may be available to you.

Reasons Behind the Colorado False Claims Act Expansion

Cases of state and local government fraud can be an expensive drain on taxpayer money. While federal cases of healthcare fraud and tax evasion often receive more media attention, state government funding may also often be abused by scam artists. Having a strong state whistleblower law can help reduce corruption, recover missing funds, and remove unethical providers and contractors from the current pool. For instance, in the first 10 years after the passage of a similar law, the State of New Jersey reported recovering $147 million in otherwise overlooked whistleblower claims.

Becoming a Colorado Whistleblower

If you have information about a company or individual who has made false claims against the Colorado state government, you can now become eligible to become a whistleblower in Colorado and may be able to receive significant financial rewards for your help. Do not wait to come forward – by the time information has been disclosed by another party or publicly reported, it becomes ineligible for a financial reward. Speak to a Colorado whistleblower lawyer today to ensure that you have taken every step possible to secure your whistleblower reward and protect against possible retaliation.

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