Whistleblowers Help the Government Collect $3.7 Billion in False Claims Act Cases in 2017

Whistleblowers Help the Government Collect $3.7 Billion in False Claims Act Cases in 2017

The U.S. Department of Justice (DOJ) announced that they were able to collect $3.7 billion in judgments and settlements for fraud and false claims last year thanks to disclosures made by whistleblowers. Since 1986, the DOJ has now collected over $56 billion dollars from individuals and companies that tried to cheat the government.

$3.4 billion of the recoveries were due to cases filed through the False Claim’s Act’s qui tam provisions. The remaining $300 million were for cases brought directly by the DOJ which indicates just how valuable the False Claims Act is.

The False Claims Act permits individuals the right to collect a percentage of any recoveries. To collect from the government, whistleblowers need to work with experienced attorneys who understand the legal requirements. For example, there can’t be any prior disclosures of the same wrong and the disclosure must provide useful evidence. The False Claims Act is used to disclose fraud involving government contracts and government agencies.

Out of the $3.4 billion in recoveries, individuals were paid $392 for making valuable disclosures. During fiscal year 2017, which ended in September 2017 an average of 12 cases were filed each week. Acting Assistant Attorney General Chad A. Readler of the DOJ emphasized the whistleblowers were essential to “uncovering the truth.” The False Claims Act is the government’s primary civil law for enabling recoveries. Recoveries for fraud are also authorized through laws the govern fraud and the SEC (Securities and Exchange Commission), the CFTC (Commodity Futures Trading Commission), and the IRS (Internal Revenue Services).

The various False Claims Act recoveries

The $3.7 billion in recoveries included:

  • $2.4 billion in health care fraud recoveries – involving hospitals, pharmacies, doctors, drug companies and laboratories. Some of the agencies who were found responsible for Medicaid, Medicare and TRICARE fraud included:
    • Shire Pharmaceuticals LLC paid $350 million for charges it and a related company, Advanced BioHealing, offered expensive dinners, entertainment, drink and travel, improper payments for speaking engagements; medical supplies and equipment; cash; and other unwarranted benefits to physicians and clinics to induce them to use their products and services
    • Mylan, Inc., a drug manufacturer, paid $465 million based on allegations it falsely classified the drug EpiPen as a generic drug to avoid paying high rebates
  • $543 million in housing and mortgage fraud recoveries – primarily from:
    • The Allied Home Mortgage Capital Corporation and Allied Home Mortgage Corporation for improperly validating numerous high-risk loans as eligible for FHA (Federal Housing Administration) insurance and then seeking insurance payments when those loans defaulted
    • PHH mortgage for high rates of underwriting misconduct involving FHA loans and insurance
  • Significant recoveries in procurement fraud cases – including:
    • $95 million from Agility Public Warehousing Co. KSC for overcharging the U.S. Department of Defense
    • $125 from Bechtel National Inc. and other companies for providing deficient products to the U.S. Department of Energy and for other alleged violations
    • $45 million from CA Inc. for improper software license and maintenance service charges to the General Services Administration

Additional recoveries included:

  • $29.5 million from Solar City Corporation for allegations it overbilled the U.S. Treasury Department
  • $30 million from Agility Public Warehousing Co. KSC, for allegations it overbilled the Lifeline Program, a federal program which offers low-income consumers discounts and subsidies for mobile phone services.
  • $16 million from ADS Inc. and its subsidiaries for charges it submitted false claims to obtain small business contracts

These cases show the value of hiring experienced whistleblower and qui tam lawyers. To understand your rights and to speak with a respected False Claims Act attorney, please phone Stephen Danz & Associates at 877-789-9707 to arrange a consultation.

Reference: Qui Tam 2018 CLE Course Book