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Banner Year for Whistleblowers and the Public, No End in Sight

Posted  October 12, 2012

By Jason Enzler

Fiscal Year 2012 just wound up and the results are in for the government’s total recoveries in False Claims Act cases:  $9 billion in fines and penalties.  This is over twice that of last year’s tally of $4 billion.  And all but one of the top 25 recoveries involved cases where individuals blew the whistle.  This past year also included some other notable firsts:

  • The largest recovery in a False Claims Act case, GlaxoSmithKline’s $3 billion settlement.  Click here to view our previous post on this settlement.
  • The first award under the S.E.C.’s whistleblower program, implemented under the recent Dodd-Frank Act.
  • The first major whistleblower award ($104 million) under the I.R.S. whistleblower program.  Click here to read our earlier post on the award.  This award holds the double distinction of also being the largest award to an individual whistleblower.

There were a few other significant trends to note.  The use and importance of state laws mirroring the False Claims Act increased.  Criminal fines were larger.  And while settlements involving healthcare and pharma fraud continued to feed the bulk of the government’s recoveries, False Claims Act activity involving mortgage, pension, and banking fraud significantly increased, including the third largest settlement of the year, Bank of America’s agreement to pay $1 billion to resolve charges of banking and mortgage fraud.

If recent events are any indication, this uptick will continue in FY 2013.  $3.5 billion in settlements already have been announced, including the $2.2 billion settlement with Johnson & Johnson.  See Here We Go Again — Johnson & Johnson To Pay Upwards Of $2.2 Billion To Settle Civil And Criminal Charges.  And increased recoveries are all the more likely now that the I.R.S., S.E.C., and C.F.T.C. whistleblower programs are up and running.

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