New York City False Claims Act

This chapter shall be known as the “New York city false claims act.”

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.

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
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(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.

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;
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(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.
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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
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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;
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(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.

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
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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.

f. 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.

. 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.

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;
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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.

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.

The corporation counsel and the commissioner of investigation shall
promulgate such rules as are necessary to effectuate the purposes of this chapter.