damages occurred, it becomes apparent that, as a matter of law, in certain instances zero benefit accrued to the government. They are the following: Change Order No. 11 - Union Hill High School, Change Orders 4-8, Change Orders 11-14 - Union Hill High School, and Change Order 24 - Union Hill High School. Additionally, a portion of the June 1978 advance for $ 100,000 can be definitively identified as a loss.
(a) Change Order No. 11 - Union Hill High School. The government's brief and appended exhibits reveal this change order was "totally false" and that the "work was not done." Change Order No. 11 was in the amount of $ 35,337. This money was falsely claimed and the government received no benefit from it. The entire figure represents a loss.
(b) Change Orders 4-8. The government was billed twice for the performance of the work covered by Change Orders 4-8. Their costs totalled $ 38,261. This claim was false and the government could not have received the work requisitioned as it had already been performed. Therefore, the United States suffered $ 38,261 in damages.
(c) Change Orders 11-14 - Union Hill. These were also submitted for payment twice, and resulted in a loss to the government. The work called for by Change Orders 11-14 could not have been rendered twice. Change Order 11, which has been established as having never been performed at all, certainly could not have been done a second time. Change Orders 11-14 cost the United States $ 113,345, which constitutes the damages suffered on this aspect of the government's claim.
(d) Change Order 24 - Union Hill. Change Order 24 was a duplicate of number 11. This represented the third time for which this same false claim was paid. The United States sustained a resultant loss of $ 35,337.
(e) June 1978 Advance for $ 100,000. The June advance was comprised of two checks. One was made out to Mazziota-D'Agostino for $ 70,000. The other went to Joseph Pissaro Trucking, and was for $ 30,000. Only a portion of each of these checks may clearly be established as damages, although the claim was undoubtedly false.
The check for $ 70,000 was delivered to Mazziota-D'Agostino and returned to Orlando the next day. Dominick D'Agostino was paid $ 18,500 for allowing this money to come down to him and for returning it. This "cut" was a cost for which the United States received no benefit. The $ 30,000 check met a similar fate. The "cut" taken out of this check was 7% or $ 2,100. This, too, was also a total loss to the United States.
Other than the $ 20,600 already accounted for, the balance of the $ 100,000 advance may not be established as damages as a matter of law. Plaintiff makes no allegations as to where the money went once it was returned to Orlando. There is no evidence offered to indicate the balance did not go into the construction project. The benefit, or lack thereof, that the United States experienced from the remaining $ 79,400 cannot be determined as a matter of law in the instant motion for summary judgment. Therefore, damages beyond the $ 20,600 in pay-offs may not be deducted from the $ 100,000 June 1978 advance and therefore may not be included within that portion of the summary judgment "pool" of damages.
There are other instances wherein the United States' damage claims are not sufficiently documented to be established by summary judgment. These include: (1) March 24, 1978 payment of $ 153,000; (2) July 31, 1979 advance for $ 100,000; (3) August 9, 1979 advance for $ 100,000; (4) August 29, 1979 payment of $ 25,000; (5) September 25, 1979 advance for $ 120,000; and (6) November 2, 1979 advance for $ 120,000.
All of the above are inadequate because of plaintiff's failure to prove, or even allege, what was done with this money. Throughout the entire time these false claims were being presented, work on the projects was being done. Perhaps very little work was in fact accomplished, but if absolutely zero benefit was received by the government, it must be proved. In order to utilize the formula that determines damages when a substandard product is claimed, the value of that which has been received must be discovered, thus rendering them eligible for inclusion in the summary judgment pool of damage funds.
Accordingly, with respect to actual damages, $ 242,880 has been established as a matter of law. Pursuant to 31 U.S.C. § 3729, this figure shall be tripled. Therefore defendants are jointly and severally liable for $ 728,640.
2. Statutory Penalties.7
The False Claims Act provides for a penalty of between $ 5,000 and $ 10,000 for each separate violation. The United States claims that 21 violations occurred, and therefore asserts that it is entitled to that same number of penalties. Defendant Genovese claims that only seven acts occurred which may be penalized under the False Claims Act. Other defendants deny that the United States is entitled to any penalties at all.
In determining the appropriate number of penalties, if any, that may be imposed against the defendants, two issues must be addressed: First, what constitutes a violation of 31 U.S.C. § 3729; and, second, each separate violation which occurred must be accounted for. In the name of expediency, these questions are most easily addressed by separately analyzing the three clauses of the False Claims Act with which we are concerned.
(a) 31 U.S.C. § 3729(a)(1): Knowing presentation of a false claim.
In a recent case, the Third Circuit listed those elements that constitute a violation of the first clause of the False Claims Act. They are as follows:
1. The defendant presented or caused to be presented, for payment or approval, to the Government of the United States a claim upon or against the United States;