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August 16, 2010

STATE BAR ASSOCIATION COMMENDS GOVERNOR PATERSON FOR SIGNING LEGISLATION TO STRENGTHEN NEW YORK'S FALSE CLAIMS ACT

New York State Bar Association President Stephen P. Younger of New York (Patterson Belknap Webb & Tyler LLP) today commended Governor David A. Paterson for signing into law legislation (A.11568/S.8378) that strengthens New York's False Claims Act.

The New York False Claims Act allows private parties to bring civil ("qui tam") actions on behalf of the state to recover fraudulent payments and overpayments made to third-party suppliers of goods and services. The state may intervene in such an action, or allow the action to proceed as a private lawsuit. The law is modeled on the Federal False Claims Act, which was amended in 2009 and 2010 as part of the federal Health Care Reform Act.

"This legislation strengthens the existing New York False Claims Act by enhancing the state's ability to obtain financial recovery for losses suffered due to fraud perpetrated by contractors and others against the government," said President Younger. "The State Bar and its Commercial and Federal Litigation section have long been strong supporters of the New York False Claims Act. I want to commend the Governor and the State Legislature for making these much-needed enhancements to further protect the interests of all New Yorkers."

The new legislation signed into law allows "qui tam" plaintiffs to bring actions for tax fraud, but only when the net income or sales of the defendant total $1 million or more and the damages pleaded in the action exceed $350,000. It also strengthens the protections for whistleblowers -- both private persons and government employees -- who uncover information concerning the misuse of government funds.

The legislation will help ensure that the federal government passes on to New York its share of any recovered funds. The value to the state of these recoveries is estimated at more than $20 million per year.

To view a copy of President Younger's letter to the Governor in support of this legislation, please visit www.nysba.org/falseclaimsactletter.

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Founded in 1876, the 77,000-member New York State Bar Association is the official statewide organization of lawyers in New York and the largest voluntary state bar association in the nation. The State Bar's programs and activities have continuously served the public and improved the justice system for more than 130 years. For more information, visit us at our website at www.nysba.org.