Section 7-801.
§ 7-801. Short title. This chapter shall be known as the "New York
city false claims act."
Section 7-802.
§ 7-802. Definitions. For purposes of this chapter, the following
terms shall mean:
1. "City" means the city of New York, and any city agency, department,
division or bureau, and any board, committee, institution, agency of
government, local development corporation or public benefit corporation,
the majority of whose members are appointed by city officials.
2. "Civil enforcement action" means a legal action brought pursuant to
section 7-804 of this chapter for the commission of any act or acts
described in subdivision a of section 7-803 of this chapter.
3. "Claim" means any request or demand, whether under a contract or
otherwise, for money or property which is made to any employee, officer,
or agent of the city, or to any contractor, grantee or other recipient,
if the city provides the money or property which is requested or
demanded or will reimburse such contractor, grantee or other recipient
for the money or property which is requested or demanded. "Claim" also
encompasses any record or statement used in presenting an obligation to
pay or transmit money or property either directly or indirectly to the
city.
4. "False claim" means any claim, or information relating to a claim,
which is false or fraudulent.
5. "Knowing" and "knowingly" mean that with respect to information, a
person: (i) has actual knowledge of the falsity of the information, or
(ii) acts in deliberate ignorance of the truth or falsity of the
information, or (iii) acts in reckless disregard of the truth or falsity
of the information. Proof of specific intent to defraud is not required.
6. "Original source" means an individual who either (i) prior to a
public disclosure pursuant to paragraph three of subdivision d of
section 7-804 of this chapter has voluntarily disclosed to the city the
information on which allegations or transactions in a claim are based,
or (ii) has knowledge that is independent of and materially adds to the
publicly disclosed allegations or transactions, and who has voluntarily
provided such information to the city.
7. "Person" means any natural person, corporation, partnership, firm,
organization, association or other legal entity or individual, other
than the city.
8. "State" means the state of New York and any state department,
agency, board, bureau, division, commission, committee, public benefit
corporation, public authority, council, office or other entity
performing a governmental or proprietary function for the state.
Section 7-803.
§ 7-803. False claims. a. Any person who:
1. knowingly presents, or causes to be presented, to any city officer
or employee, a false claim for payment or approval by the city;
2. knowingly makes, uses, or causes to be made or used, a false record
or statement to get a false claim paid or approved by the city;
3. conspires to defraud the city by getting a false claim allowed or
paid by the city;
4. has possession, custody, or control of property or money used, or
to be used, directly or indirectly, by the city and, intending to
defraud the city or willfully conceal the property or money, delivers,
or causes to be delivered, less property or money than the amount for
which the person receives a certificate or receipt;
5. is authorized to make or deliver a document certifying receipt of
property used, or to be used, directly or indirectly, by the city and,
intending to defraud the city, makes or delivers the receipt without
completely knowing that the information on the receipt is true;
6. knowingly buys, or receives as a pledge of an obligation or debt,
public property from an officer or employee of the city knowing that
such officer or employee lawfully may not sell or pledge the property;
or
7. knowingly makes, uses, or causes to be made or used, a false record
or statement to conceal, avoid, or decrease, directly or indirectly, an
obligation to pay or transmit money or property to the city;
shall be liable to the city for three times the amount of damages
which the city sustains because of the act or acts of such person, and a
civil penalty of between five thousand and fifteen thousand dollars for
each violation of this section, except that any party to a civil
enforcement action commenced may request the court to assess, and the
court may agree to so assess, not more than two times the amount of
damages sustained because of the act or acts of such person if all of
the following circumstances are found:
(i) The person committing the violation of section 7-803 of this
chapter had furnished all information known to such person about such
act or acts to (a) the commissioner of investigation or (b) the
corporation counsel or a city agency head, who shall refer such
information to the commissioner of investigation, and has furnished such
information within thirty days of the date on which such person first
obtained the information;
(ii) such person fully cooperated with any government investigation of
such violation; and
(iii) at the time such person furnished information about the
violation, no criminal or civil action or proceeding, or administrative
action had commenced with respect to such violation, and the person did
not have actual knowledge of the existence of an investigation into such
violation.
b. A person who violates this section shall also be liable for the
costs, expenses and attorneys' fees of a civil enforcement action and
for the cost of the city's investigation.
Section 7-804.
§ 7-804. Civil actions for false claims. a. If the corporation counsel
finds that a person has violated or is violating the provisions of
section 7-803 of this chapter, he or she may institute a civil
enforcement action against that person in any court of competent
jurisdiction.
b. 1. Any person may submit a proposed civil complaint to the city
alleging violations of section 7-803. Proposed civil complaints shall be
signed and verified and shall include all material evidence and
information possessed by such person in support of the allegations in
such proposed civil complaints. The city shall diligently investigate
all such proposed civil complaints. The city may request such additional
information as it deems necessary from the person submitting a proposed
civil complaint.
2. The corporation counsel and the commissioner of investigation shall
promulgate rules establishing a protocol detailing the procedures by
which the city will address proposed civil complaints after they have
been submitted, which protocol shall include the requirement that within
one hundred eighty days of receipt of a proposed civil complaint, the
city shall, in writing, notify the person who submitted the proposed
civil complaint that the corporation counsel:
(i) intends to commence a civil enforcement action based on the facts
alleged in the proposed civil complaint against one or more of the
defendants named in the proposed civil complaint, in which case he or
she shall commence such action within ninety days of such notification,
provided that if the corporation counsel determines that a delay in
commencing such action is warranted, he or she may delay such
commencement, upon notice to the person who submitted the proposed civil
complaint, for an additional ninety days at which time he or she shall
commence such action;
(ii) designates the person or, if the person is not an attorney, the
attorney of such person, as a special assistant corporation counsel for
purposes of filing a civil enforcement action against one or more of the
defendants named in the proposed civil complaint; or
(iii) declines to commence a civil enforcement action or designate
such person to commence a civil enforcement action in which case the
corporation counsel shall state in the notification its reason for doing
so.
3. The corporation counsel shall commence a civil enforcement action
or designate the person who submitted the proposed civil complaint or,
if the person is not an attorney, his or her attorney, to commence a
civil enforcement action unless:
(i) the proposed civil complaint is barred for the reasons set forth
in subdivision d of this section;
(ii) the corporation counsel has determined that the proposed civil
complaint is based upon an interpretation of law or regulation which if
adopted, would result in significant cost to the city;
(iii) the corporation counsel has determined that commencing a civil
enforcement action would interfere with a contractual relationship
between the city and an entity providing goods or services which would
significantly interfere with the provision of important goods or
services, or would jeopardize the health and safety of the public; or
(iv) the corporation counsel has determined that the complaint, if
filed in a court of competent jurisdiction, would be dismissed for
failure to state a claim upon which relief may be based.
c. If the commissioner of investigation determines that a civil
enforcement action may interfere with or jeopardize an investigation by
a governmental agency, then the corporation counsel may decline to
commence a civil enforcement action based on a proposed civil complaint
or to designate the person who submitted such proposed civil complaint
to commence such action, provided that the corporation counsel notifies
the person who submitted the proposed civil complaint of such
determination within ninety days of receipt by the city of such proposed
civil complaint and every one hundred eighty days thereafter until such
time as the commissioner of investigation determines that such civil
enforcement action would no longer interfere with or jeopardize a
governmental investigation, at which time the corporation counsel shall
provide to the person who submitted the proposed complaint the
notification required in paragraph two of subdivision b of this section.
The determination by the commissioner of investigation shall be final.
d. Certain actions barred. This section shall not apply to claims,
records, or statements made pursuant to federal, state or local tax law
nor to any proposed civil complaints:
1. based upon one or more false claims with a cumulative value of less
than twenty five thousand dollars;
2. based upon allegations or transactions which are the subject of any
pending criminal or civil action or proceeding, including a civil
enforcement action, or an administrative action in which the city is
already a party;
3. if substantially the same allegations or transactions as alleged in
the proposed complaint were publicly disclosed
(i) in a criminal, civil or administrative hearing;
(ii) in a legislative or administrative report, hearing, audit or
investigation; or
(iii) by the news media and likely to be seen by the city officials
responsible for addressing false claims;
unless the person who submitted the proposed complaint is an original
source of the information. The corporation counsel may, in his or her
absolute discretion, waive the application of this paragraph.
4. based upon information discovered by an employee of the city, state
or federal government in the course of his or her employment unless: (i)
such employee first reported such information to the department of
investigation; and (ii) the city failed to act on the information within
six months of its receipt by the department of investigation; or
5. against the federal government, the state of New York, the city or
any officer or employee acting within the scope of his or her
employment.
e. Nothing herein shall be construed as authorizing anyone other than
the corporation counsel and a person or attorney authorized pursuant to
this chapter to commence a civil enforcement action to represent the
city of New York in legal proceedings.
f. Pending and related actions. 1. No person, other than the
corporation counsel, may intervene or bring a related action based upon
the facts underlying a civil enforcement action, unless such other
person has first obtained the permission of the corporation counsel to
intervene or to bring such related action.
2. Regardless of whether the corporation counsel has commenced a civil
enforcement action or another party has been designated to do so, the
city may elect to pursue any alternate action with respect to the
presentation of false claims, provided that the person who submitted the
proposed civil complaint upon which such alternate action is based, if
any, shall be entitled to the same percentage share of any cash proceeds
recovered by the city as such person would have been entitled to if such
alternate action was a civil enforcement action.
g. Rights of the parties. 1. If the corporation counsel elects to
commence a civil enforcement action, then the city shall have the sole
authority for prosecuting, and, subject to the approval of the
comptroller, settling the action and may move to dismiss the action, or
may settle the action notwithstanding the objections of the person who
submitted the proposed civil complaint upon which such civil enforcement
action is based.
2. If a person who submitted a proposed complaint or his or her
attorney has been designated to commence a civil enforcement action,
then the corporation counsel and such authorized person or attorney
shall share authority for prosecuting the case. However, the corporation
counsel may move to dismiss the action notwithstanding the objection of
the person who submitted the proposed civil complaint provided such
person has been served with an appropriate motion and the court has
provided such person with an opportunity to be heard. The corporation
counsel may also, subject to the approval of the comptroller, settle the
action notwithstanding the objection of the person who submitted the
proposed civil complaint if the court determines after providing such
person with an opportunity to be heard, that the proposed settlement is
fair, adequate, and reasonable.
3. The corporation counsel may apply to the court for and the court
may issue an order restricting the participation of a person designated
to commence a civil enforcement action in such litigation
notwithstanding the objections of such person if the court determines,
after providing such person an opportunity to be heard, that such
person's unrestricted participation during the course of the litigation
would interfere with or unduly delay the prosecution of the case, or
would be repetitious or irrelevant, or upon a showing by the defendant
that such person's unrestricted participation during the course of the
litigation would be for purposes of harassment or would cause the
defendant undue burden. Such restrictions may include, but need not be
limited to: (i) limiting the number of witnesses such person may call,
(ii) limiting the length of the testimony of such witnesses, (iii)
limiting such person's cross-examination of witnesses, or (iv) otherwise
limiting such person's participation in the litigation.
4. The corporation counsel may apply to the court for a stay of any
civil enforcement action if it will interfere with any investigation or
prosecution of a criminal matter arising out of the same facts.
h. Under no circumstances shall the city be bound by an act of a
person designated to commence a civil enforcement action.
i. Awards from proceeds. 1. If the corporation counsel has elected to
commence a civil enforcement action based on a proposed civil complaint,
then the person or persons who submitted such proposed civil complaint
collectively shall be entitled to receive between fifteen and
twenty-five percent of the proceeds recovered in such civil enforcement
action or in settlement of such action. Where the court finds that the
action was based primarily on disclosures of specific information (other
than information provided by the person bringing the action) relating to
allegations or transactions in a criminal, civil or administrative
hearing, in a legislative or administrative report, hearing, audit or
investigation, or from the news media, the court may award such sums as
it considers appropriate, but in no case more than ten percent of the
proceeds, taking into account the significance of the information and
the role of the person or persons who submitted the proposed civil
complaint in advancing the case to litigation.
2. If a person, or such person's attorney has been designated to
commence a civil enforcement action based on such person's proposed
civil complaint, then such person shall be entitled to receive between
twenty-five and thirty percent of the proceeds recovered in such civil
enforcement action or in settlement of such action.
3. The court shall determine the share of the proceeds to which a
person submitting a proposed complaint is entitled, and may take into
account the following factors:
(i) the extent to which the person who submitted the proposed civil
complaint contributed to the prosecution of the action, either in time,
effort or finances;
(ii) whether the civil enforcement action was based primarily on
information provided by the person who submitted the proposed civil
complaint, rather than information derived from public sources such as
allegations or transactions in a criminal, civil or administrative
hearing, in a legislative or administrative report, hearing, audit or
investigation, or from the news media;
(iii) any unreasonable delay by such person in submitting the proposed
civil complaint;
(iv) the extent to which the allegations involve a significant safety
issue;
(v) whether the person who submitted the proposed civil complaint that
formed the basis of the civil enforcement action initiated the violation
of section 7-803 of this chapter alleged in such action, in which case
the percentage share of the proceeds of the action that such person
would otherwise receive under this section may be reduced below the
minimum percentages set forth in paragraphs one and two of this
subdivision, taking into account the role of such person in advancing
the case to litigation and any relevant circumstances including those
pertaining to the violation;
(vi) whether the person who submitted the proposed civil complaint
that formed the basis of the civil enforcement action has been charged
with criminal conduct arising from his or her role in the alleged
violation of section 7-803 of this chapter, in which case such person
shall not receive any share of the proceeds of the action if convicted
on such charges; and
(vii) fundamental fairness and any other factors the corporation
counsel and the court deem appropriate.
j. Costs, expenses and attorneys' fees. 1. In any civil enforcement
action commenced pursuant to this chapter, the corporation counsel, or a
person designated to commence such civil enforcement action, if
applicable, may apply for an amount of reasonable expenses, plus
reasonable attorneys' fees, plus costs. Costs and expenses shall include
costs incurred by the department of investigation in investigating the
false claim and prosecuting conduct relating thereto. All such expenses,
attorneys' fees and costs shall be awarded directly against the
defendant and shall not be charged from the proceeds, but shall only be
awarded if the city prevails in the action
2. In a civil enforcement action commenced by a designated person or a
such person's attorney the defendant may apply for an amount of
reasonable expenses, plus reasonable attorneys' fees, plus costs and the
court may award such expenses, attorneys' fees and costs if it
determines that such civil enforcement action was frivolous. All such
expenses, attorneys' fees and costs shall be awarded directly against
the person or person's attorney that commenced the action.
k. The city shall not be liable for any expenses, attorneys' fees or
costs that a person or a person's attorney incurs in submitting a
proposed civil complaint or commencing or litigating a civil enforcement
action pursuant to this section.
Section 7-805.
§ 7-805. Remedies of employees. a. 1. Any officer or employee of the
city of New York who believes that he or she has been the subject of an
adverse personnel action, as such term is defined in paragraph one of
subdivision a of section 12-113 of the administrative code of the city
of New York; or
(2) any officer or employee of the city or state of New York, who
believes that he or she has been the subject of a retaliatory action, as
defined by section seventy-five-b of the civil service law; or
(3) any non-public employee who believes that he or she has been the
subject of a retaliatory action by his or her employer, as defined by
section seven hundred forty of the labor law because of lawful acts of
such employee in furtherance of a civil enforcement action brought under
this section, including the investigation, initiation, testimony, or
assistance in connection with, a civil enforcement action commenced or
to be commenced under this section, shall be entitled to all relief
necessary to make the employee whole. Such relief shall include but not
be limited to: (i) an injunction to restrain continued discrimination,
(ii) reinstatement to the position such employee would have had but for
the discrimination or to an equivalent position, (iii) reinstatement of
full fringe benefits and seniority rights, (iv) payment of two times
back pay, plus interest, and (v) compensation for any special damages
sustained as a result of the discrimination, including litigation costs
and reasonable attorneys' fees.
b. An employee described in subdivision a of this section may bring an
action in any court of competent jurisdiction for the relief provided in
this section.
Section 7-806.
§ 7-806. Limitation of actions; burden of proof. a. A civil
enforcement action shall be commenced no later than the latest following
date: (i) six years after the date on which the violation of section
7-803 is committed, or (ii) three years after the date when facts
material to the right of action are known or reasonably should have been
known by the corporation counsel or the department of investigation, not
to exceed ten years after the date on which the violation is committed.
b. In any civil enforcement action, all essential elements of the
cause of action, including damages, shall be proven by a preponderance
of the evidence.
Section 7-807.
§ 7-807. Other law enforcement authority and duties. This chapter
shall not be construed as: (i) affecting the authority, or relieving the
duty, of any federal, state or local law enforcement agency to
investigate and prosecute suspected violations of law, (ii) preventing
or prohibiting a person from voluntarily disclosing any information
concerning a violation of section 7-803 to any such law enforcement
agency, (iii) limiting any of the powers granted to the city, elsewhere
in this chapter or under other laws, to investigate possible violations
of this chapter and take actions against wrongdoers, or (iv) diminishing
in any way the responsibility of city employees to report any wrongdoing
to the commissioner of investigation pursuant to any executive order or
statute.
Section 7-808.
§ 7-808. Annual report. Not later than March first of each year
following the year of enactment, the corporation counsel shall transmit
to the mayor and the speaker of the council a report setting forth, with
respect to the prior calendar year, the following information:
1. The number of proposed civil complaints submitted pursuant to
section 7-804;
2. The number of proposed civil complaints resulting in the
corporation counsel commencing a civil enforcement action based upon
such submission;
3. The number of proposed civil complaints resulting in the
corporation counsel designating the person, or such person's attorney,
to act as a special assistant corporation counsel for purposes of
commencing a civil enforcement action;
4. The disposition of each civil enforcement action filed, including
(i) whether the case was based on a proposed civil complaint; and
(ii) the monetary value of the award or settlement in each action
commenced by the person who submitted a proposed civil complaint to the
city; and
(iii) the monetary value of any award or settlement in each action
commenced by the city.
5. The number of proposed civil complaints under review by the city
and pending a determination by the corporation counsel as to the
commencement of a civil enforcement action;
6. The number of proposed civil complaints for which the corporation
counsel determined not to commence a civil enforcement action and a
statistical summary of the reasons for such determinations.
7. Any other information related to proposed civil complaints
submitted pursuant to section 7-804 which the corporation counsel deems
appropriate.
Section 7-809.
§ 7-809. Comptroller. Nothing in the local law that added this chapter
is intended to modify, supersede or in any way diminish the powers
granted to the comptroller pursuant to section ninety-three of the
charter to settle and adjust all claims for the city.
Section 7-810.
§ 7-810. Regulations. The corporation counsel and the commissioner of
investigation shall promulgate such rules as are necessary to effectuate
the purposes of this chapter.
To the extent possible under law, Friends of Devin Balkind for Public Advocate has waived all copyright and related or neighboring rights to New York City Administrative Code. This work is published from: United States.
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