Overview of the State Statute. New York enacted the New York False Claims Act (NYFCA) in 2007 to establish a cause of action for false claims for payment or approval submitted to New York State or a local government. The NYFCA provides that the Attorney General, a local government or a private citizen may prosecute cases under the Act.
Comparison with the FCA. The NYFCA is very similar to the federal False Claims Act, with one significant exception. In 2010, New York amended the NYFCA to authorize actions based on tax fraud. The NYFCA, the only state false claims act statute to explicitly authorize actions based on tax fraud, provides that it applies to false claims, statements or records made under the tax law if (i) the net income or sales of the person against whom the action is brought equals or exceeds $1 million for any taxable year subject to such action; and (ii) the damages pleaded in such action exceed $350,000. (N.Y. State Fin. L. § 189.)
The NYFCA also differs from the federal FCA in other minor respects. For example:
- Unlike the federal FCA, which is limited by a six-year statute of limitations (U.S.C. § 3731 [b]), the NYFCA has a ten-year statute of limitations (N.Y. State Fin. L. § 192 ).
- The NYFCA provides for penalties ranging from $6,000 to $12,000, as opposed to the $5,500 to $11,000 penalty range provided under the federal FCA. (N.Y. State Fin. L. § 189 (g); compare 31 U.S.C. § 3729(a)(1)(g).
- Although the federal FCA and NYFCA both protect from retaliation employees contractors, or agents who engage in lawful acts in furtherance of a false claims action, the NYFCA defines lawful acts to include “obtaining or transmitting to the state, a local government, a qui tam plaintiff, or private counsel solely employed to investigate, potentially file, or file” a false claims action, documents, correspondence, data, email or other information “even though such act may violate a contract, employment term, or duty owed to the employer or contractor, so long as the possession and transmission of such documents are for the sole purpose of furthering efforts to stop one or more violations of [the NYFCA].” (N.Y. State Fin. L. § 191 ).