Recently, Allstate New Jersey Insurance Company helped New Jersey recover $718,000 owed to the state’s charity care fund, at no cost to the state. Allstate used the New Jersey False Claims Act, N.J.S.A. 2A:32C-1, et seq. (NJFCA), a law that gives taxpayers a powerful tool to recoup money stolen from the state. Unfortunately, the law does not apply to counties, municipalities and local school districts. That should change.

In 2008, New Jersey passed a state FCA modeled substantially on the federal FCA. Like its federal counterpart, which dates back to the Civil War, the NJFCA encourages private individuals and businesses, “relators,” to alert state officials when they learn of a fraud, and bring suit if necessary. If New Jersey recovers money in the resulting lawsuit, then the relator is entitled to receive a reward of between 15 and 30 percent of the state’s recovery, depending upon the state’s involvement in the prosecution of the suit.

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