Defense Contractor Fraud
Early day defense contractors, dating back to the Civil war, are attributed with having sold the Union Army decrepit horses and mules in poor health, faulty rifles and ammunition, and spoiled rations and provisions. As a result, the False Claims Act was passed by Congress on March 2, 1863. Central to the False Claims Act is that it permits citizens to sue on behalf of the government and be paid a percentage of the recovery. Defense contractors continue to be a significant source of fraud on the government, with the only change appearing to be the sheer magnitude of the fraud.