On May 19, 2005, Mayor Bloomberg signed into law the New York City False Claims Act (Local Law 53 of 2005), which allows the City to authorize citizens to bring lawsuits to recover treble damages for fraudulent claims submitted to the City. An important new tool with which the City can fight fraud perpetrated against it, the statute creates a way for people to help the City recover money lost through fraud, and is patterned after the Federal "Qui Tam" statute. As an incentive to bring suits, this new law allows successful citizen plaintiffs, under certain circumstances, to keep as much as 30% of funds they help recover.

The law also requires the City's Law Department and the Department of Investigation to promulgate rules governing the protocol for processing proposed civil complaints under the False Claims Act. Such rules became effective on August 8, 2005, upon publication in the City Record.