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California Attorney General Xavier Becerra and Assembly Member Mark Stone introduced legislation to strengthen protections for consumers under the state’s False Claims Act. The proposed AB 2570 authorizes the Attorney General and other prosecuting officials to conduct an investigation into the possible filing of false claims, records, or statements under the Revenue and Taxation Code. Additionally, the proposed legislation gives authority to the Attorney General and other prosecuting officials to recover public funds that were lost due to tax fraud or misrepresentations. Over the past decade, California’s annual estimated tax gap, the difference between total taxes owed and total taxes paid on time, has been increasing.  The state’s estimated tax gap is $20 billion.

Providing more legal tools to protect California programs and services

AG Becerra and Assembly Member Stone believe that AB 2570 will help prevent fraud and false claims, thus protecting California taxpayers and communities from harm. Every time fraud or a false claim is committed against the government, communities lose funding necessary to support vital public services. In a statement, AG Becerra said, “When companies cheat our government, hard-working taxpayers are left holding the bag. AB 2570 would give my office and local prosecutors improved legal tools to protect our state’s programs and services against fraudulent actors, including those committing egregious cases of tax fraud.” “The California False Claims Act has been an effective tool at revealing, deterring, and punishing those who defraud the government of public funds AB 2570 will expand and improve upon this law, allowing California to better protect public dollars and combat fraud against the state and local governments,” said Assembly Member Stone. AG Becerra sued BP Energy and its affiliates for allegedly violating the California False Claims Act by intentionally overcharging the state for natural gas purchased between 2003 and 2012.  The defendants agreed to pay $102 million to settle the case in January 2018.