DOJ Recovers a Record Amount under False Claim Act and Qui Tam Cases

upmisxb0wd0-srikanta-h-uBetween Oct. 2015 and Sept. 2016, the Department of Justice (DOJ) won more than $4.7 billion in judgements and settlements from civil fraud and false claims against the government, a DOJ press release stated. This recovery is from cases brought under the False Claims Act (FCA), including qui tam claims in which a whistleblower brings to light a fraud being perpetrated against the government. The amount is particularly important to note since it is the third highest recovery for a fiscal year since the FCA was enacted. It is also crucial in the sense that it confirms the effectiveness of qui tam cases and other claims brought under the FCA. The legal protections and incentives for whistleblowers to come forward enables the government to stop fraudulent schemes and return funds back to programs that support low-income families, veterans, and the elderly.

Fraud is Common within the Health Care Industry

Fraudulent claims within the health care industry cost the government billions of dollars. The DOJ reported $2.5 billion was recovered for the federal government in relation to this sector from hospitals, physicians, nursing homes, labs, medical device companies, and drug companies during the 2016 fiscal year. Additionally, a total of $19.3 billion has been won in health care fraud claims since January 2009. The recovered funds go back to federally funded medical programs such as Medicare, Medicaid, and TRICARE.  

Some of the most significant recoveries were from medical device and drug companies. Wyeth and Pfizer Inc. paid $784.6 million in federal and state claims for fraudulent prices on two drugs. Novartis Pharmaceuticals Corp. paid $390 million due to providing kickbacks to specialty pharmacies that recommended certain drugs.

The second industry to see the greatest returns for FCA claims is the housing and mortgage fraud. The government retrieved significant settlements from Wells Fargo and Freedom Mortgage Corp. for $1.2 billion and $113 million, respectively. The rest of the recovery came from finding fraudulent claims to federal programs and contracts, procurement issues, and for-profit schools.

Recovery Specific to Qui Tam Cases

Of the $4.7 billion recovery for the federal government in the fiscal year 2016, qui tam cases were responsible for obtaining $2.9 billion. During a qui tam lawsuit, a whistleblower files a civil lawsuit under the FCA alleging an individual or business is perpetuating a fraud against the federal government. The whistleblower is essentially suing the wrongdoer on behalf of the government. The DOJ investigates and decides whether to join the suit. The whistleblower has the opportunity to receive compensation once a judgement or settlement is reached in favor of the government, whether or not the government joined the suit.

There were 702 qui tam lawsuits filed in the past year, averaging 13.5 new cases every week. In payment of bringing these cases forward, the federal government paid $519 million to the individual whistleblowers.

For a broader look at the effect of qui tam cases, the DOJ provided figures for recovery since January 2009. The federal government has recovered $24 billion in judgements and settlements for qui tam cases while paying out more than $4 billion to the individuals who filed the qui tam complaints.

Contact a San Francisco Qui Tam Lawyer for More Information

If you believe you have knowledge regarding a false claim or fraud against the California or federal government, contact the experienced qui tam lawyers of Brod Law Firm. We can review your situation with you and explain the process of a qui tam suit. These claims can take years, but the FCA protects you and your job in a number of ways so that you do not have to fear retribution.

Call Brod Law Firm at 1 (800) 427-7020 to schedule a consultation.


(image courtesy of Srikanta H.U.)

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