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Date: 4/13/2010
On January 1, 2010, the newly enacted Oregon False Claims Act ("OFCA") became effective, adding Oregon to the ever-increasing list of states with enforcement authority to assess large monetary penalties against businesses and individuals who submit "false" requests for payment or other compensation to state agencies.
The OFCA imposes liability for, among other things: (1) presenting a payment request or claim that is knowingly false, (2) presenting supporting claim documentation that is based on false information, and (3) failing to report an overpayment by the state within a reasonable time after the contractor discovers the overpayment. Under the Act, "reckless disregard of the false or fraudulent nature" of the claim or payment request is sufficient to establish knowledge, even if the contractor does not specifically intend to submit false information.
The OFCA does not impose criminal liability, but does give the Attorney General the authority to bring civil lawsuits to: (1) recover any funds paid out by the state for fraudulent claims, and (2) impose civil penalties on both the entity and any individual that is found to have knowingly or recklessly caused the entity to submit the false claim. Civil penalties are imposed for each violation of the Act (i.e., each false payment request, etc.) in the amount of $10,000 or twice the value of the state's damages, whichever is greater.
Penalties under the OFCA are not exclusive and can be imposed in addition to any other applicable civil or criminal penalties under existing Oregon law.
Like all other claims and requests for payment, this new statutory scheme applies to all pay requests and claims made in connection with construction projects. Contractors, and individuals at contractor firms who process pay applications and/or prepare claims on public jobs, may find themselves subject to more scrutiny after January 1, 2010.
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Contact: Aaron M Hessel - Associate
Phone: 503-221-0699
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