On November 19, 2010, a qui tam complaint was unsealed against 78 Indiana prosecutors alleging violations of the Indiana False Claims Act. The complaint alleges that the prosecutors violated the Indiana FCA by failing to pay into the Indiana common school fund the net proceeds of criminal forfeiture actions.

Indiana’s criminal forfeiture law, codified at Indiana Code section 34-24-1-4, requires that the proceeds of forfeiture actions after deducting “law enforcement costs” must be turned over to the common school fund, which makes loans to Indiana school districts. According to The Indianapolis Star, certain Indiana counties have developed different definitions of the law enforcement costs that are factored into the application of Indiana Code section 34-24-1-4. One county has purportedly taken the position that law enforcement costs include the overall costs of law enforcement, with the result that the costs of law enforcement always exceed the proceeds of forfeiture actions and nothing need be paid into the common school fund.

The complaint alleges that from August 29, 2008 to July 19, 2010, 92 Indiana counties paid only $95,509.72 (out of an estimated $17 million) in forfeiture proceeds into the common school fund. If the suit is successful, the relator would be entitled to as much as 30% of any monies recovered.

Under the Indiana FCA, the Attorney General has the right to intervene and prosecute the action on behalf of the state. However, the Attorney General may also represent state prosecutors in any civil action relating to their jobs as prosecutors. A press release from the Indiana Attorney General’s Office reports that the Attorney General has chosen to defend the county prosecutors named in the action and another indicates that the Attorney General is working with the Indiana legislature to reform Indiana’s forfeiture law.