Surety Liability Under the False Claims Act
The federal Miller Act involves government development contracts above $100,000 to be bonded. This course of action consists of coverage organizations, regarded as “sureties,” who difficulty payment or effectiveness bonds to contractors, who in turn furnish the necessary bonds to the federal govt. The bonds guarantee that the contractor will comply with the phrases of the contract and accomplish as necessary. Even though the sureties do not interact straight with the federal govt, a recent choice from the US District Courtroom in DC indicates that sureties could face legal responsibility where by the bonded contractor violates the civil Untrue Statements Act (“FCA”), 31 U.S.C. § 3729. In Scollick ex rel. United States v. Narula, No. 1:14-CV-01339-RCL, 2022 WL 3020936 (D.D.C. July 29, 2022) the courtroom held, less than the details of that case, that the sureties experienced no understanding of the fraud allegedly fully commited by the bonded contractor,