November 21, 2014

DOJ Reports Continued Surge in False Claims Act Recoveries Prompted by Whistleblowers

LincolnBy the C|C Whistleblower Lawyer Team

Yesterday, the Department of Justice reported its recovery of a record $5.69 billion in False Claims Act settlements and judgments during the 2014 fiscal year (ending September 30). It is the first time DOJ has crossed the $5 billion mark and brings to $22.75 billion the total False Claims Act recoveries DOJ has obtained since January 2009. That 6-year tally represents more than half the recoveries since Congress amended the False Claims Act 28 years ago (in 1986), with the three largest annual recoveries occurring in the past three years. See DOJ Press Release.

What is the cause of this continued surge in the government’s False Claims Act recoveries? As the DOJ made clear in its announcement of this year’s record results, it is all about the whistleblowers. Of the $5.69 billion the government recovered this year, nearly $3 billion related to whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  More than 700 of these suits were filed this year, up from the 300 to 400 filed only a few years ago, and the measly 30 filed in 1987. According to the DOJ, it is this steadily growing number of qui tam actions that “has led to increased recoveries, which exceeded $2 billion for the first time in fiscal year 2010, and has approached or exceeded $3 billion ever since.”

As these recoveries have increased, so have the whistleblower awards. This past year, these awards totaled $435 million, bringing to almost $2.5 billion the total paid out to whistleblowers since 2009. Assistant Attorney General Joyce Branda obviously believes they have earned every penny. “We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs,” she said. “In strengthening and protecting the False Claims Act, Congress has given us the law enforcement tools that are so essential to guarding the treasury and deterring others from exploiting and misusing taxpayer dollars.  We are grateful for their continued support.”

Here is the DOJ’s rundown of this year’s False Claims Act highlights.

Housing and Mortgage Fraud. DOJ recovered $3.1 billion relating to fraud and misconduct connected to the housing and mortgage crisis, including $1.85 billion from Bank of America, $614 million from JPMorgan Chase, $428 million from SunTrust and $200 million from U.S. Bank

Health Care Fraud. DOJ recovered $2.3 billion for health care fraud, including $1.1 billion from Johnson & Johnson (for off-label promotion of prescription drugs Risperdal, Invega and Natrecor); $116 million from Omnicare (for kickbacks to nursing homes); $98 million from Community Health Systems Inc. (for overbilling); $85 million from Halifax Hospital Medical Center (for violating Stark Law cross-ownership rules); $150 million from Amedisys Inc. (for medically unnecessary services and kickbacks); $30 million from Boston Scientific Corp. (for defective heart devices); $39 million from King’s Daughters Medical Center; and $16 million from Saint Joseph Health System (both for unnecessary coronary procedures).

Government Procurement Fraud. Significant recoveries in the procurement arena included $32.5 million from Hewlett-Packard Co. (for fraud in its US Postal Service contract); $23 million from The Boeing Company (for fraud in its Globemaster contract with the U.S. Air Force); and $80 million from BNP Paribas (for violating the USDA’s Supplier Credit Guarantee Program).  In addition, the government filed lawsuits against Kellogg, Brown & Root (for misconduct in its US Army wartime logistical support contract) and CA Inc. (for overcharging in its General Services Administration contracts).

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