Posts Tagged ‘recovery’

Why Steven Solomon Is Wrong About False Claims Act Whistleblower Awards

Insurance Fraud

FCAOn December 30, 2014, the New York Times “DealBook” section posted a column by Professor Steven Solomon slamming whistleblower awards for rewarding wrongdoers who engage in fraud, likening the awards to giving bank robbers a cut of the loot. Solomon’s column, “Whistle-Blower Award Lures Wrongdoers Looking to Score,” suggests that whistleblowers are criminals who set up fraudulent schemes to make millions by flipping the script and reporting the very fraud that they initiated.

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DOJ Releases FY2014 Statistics, Record False Claims Act Recoveries

On the heels of the SEC’s recent report of its whistleblower statistics, the Department of Justice released statistics detailing the staggering False Claims Act recoveries in FY2014.  In the fiscal year ending September 30, 2014, the United States obtained a record $5.69 billion in settlements and judgments from civil cases involving false or fraudulent claims against the government.  This brings the five year total since January 2009 to $22.75 billion – more than half the recoveries since the inception of the modern False Claims Act in 1986.

Acting Assistant Attorney General Joyce Branda – in the role she took over when Stuart Delery became the Acting Associate Attorney General in September 2014 – said, “It has been an extraordinary year for civil fraud recoveries … The False Claims Act was enacted to both protect vital taxpayer dollars and deter those who would misuse public funds.  The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”

The number of False Claims Act qui tam suits initiated by whistleblowers exceeded 700 for the second year in a row.  In FY2014, qui tam cases accounted for nearly $3 billion, with whistleblowers receiving $435 million as relator’s share awards.

The Department of Justice’s report details specific recoveries from the housing and mortgage fraud arena, which totaled $3.1 billion from various banks and financial institutions, and from the health care fraud area, which totaled $2.3 billion.  Notably, FY2014 was the fifth straight year that the Department of Justice has recovered more than $2 billion from healthcare related cases.  The Department of Justice’s report also identifies the $85 million recovery from Halifax Hospital Medical Center, in which James Hoyer acted as local counsel for relator Elin Baklid-Kunz.

Finally, the Department of Justice’s press release specifically recognizes the invaluable efforts of False Claims Act whistleblowers.  The report acknowledges that the growing number of qui tam lawsuits has led to increased recoveries.  Branda commented, “We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs.  In strengthening and protecting the False Claims Act, Congress has given us the law enforcement tools that are so essential to guarding the treasure and deterring others from exploiting and misusing taxpayer dollars.  We are grateful for their continued support.”

For the Department of Justice’s full press release, click here.

To contact James Hoyer about a suspected False Claims Act violation, or if you are being retaliated against as a whistleblower, please contact us here or call us toll-free at 1-800-651-2502.


Health-Care False Claims Cases Reap $18.3 Billion, Report Shows

Whistleblower Award

Health-Care False Claims Cases Reap $18.3 Billion, Report Says

Stack Of CashFederal and state governments recovered $18.3 billion between 2008 and 2012 from lawsuits and criminal cases claiming health-care companies overbilled, according to an advocacy group that encourages whistle-blowers.

Taxpayers Against Fraud, a Washington-based group, released a study showing total health-care recoveries, excluding whistleblower payments, rose to $5.8 billion last year from $1.5 billion in 2008. Those totals include criminal fines and state false claims recoveries, two figures not normally tallied.

Still, recoveries are a small fraction of the $2.8 trillion the U.S. spends annually on health care, or 17.8 percent of the gross domestic product, according to the World Health Organization. Senator Charles Grassley, an Iowa Republican who sponsored a 1986 amendment that propelled the U.S. law forward, said the Justice Department should do more to deter companies than collect payments.

“Right now, it’s a cost of doing business,” Grassley said in an interview. “When it’s a cost of doing business, behavior isn’t going to change and criminal prosecution needs to be pursued. When you jail somebody, it makes a bigger point than any fine you’re going to get.”

The health-care recoveries involve dozens of companies, including Pfizer Inc. (PFE:US), the world’s biggest drugmaker; GlaxoSmithKline Plc (GSK), the biggest U.K. drugmaker; Merck & Co. (MRK:US), the second-biggest U.S. drugmaker by sales; and McKesson Corp. (MCK:US), the largest U.S. pharmaceutical distributor. Many of the settlements involve corporate integrity agreements pledging compliance with the law.

29 States

Most cases were filed under the federal False Claims Act, the law that lets citizens sue on behalf of the government and share in any recovery. Twenty-nine states have similar laws. Most of the recoveries by the U.S. between 1987 and 2012 were in health-care cases, where the government recovered $24.1 billion, according to Justice Department statistics.

Between 2008 and 2012, the civil U.S. recoveries amounted to $9.4 billion, according to the Justice Department. The TAF report shows that criminal fines associated with false claims recoveries over the same period were $4.5 billion, while state recoveries were $4.4 billion. Taken together, the civil, criminal and state false claims recoveries account for the five-year total of $18.3 billion.


Whistleblowers over that period collected $1.4 billion beyond the $9.4 billion paid to the U.S. The law allows whistle-blowers to recover between 15 and 30 percent. Not every case settled by the U.S. was initiated by whistle-blowers.

The TAF report argues that the federal government recovers about 20 times more than it spends on investigations and prosecutions of health-care fraud cases.

Whistleblowing is increasing in other sectors, including finance and taxation. With programs in place at the Securities and Exchange Commission, the Internal Revenue Service, and the U.S. Commodity Futures Trading Commission, many more cases are coming, according to Patrick Burns, co-executive director of TAF.

“We are on the edge of a new era of incentivized integrity programs,” said Burns. “It takes a long time to investigate, negotiate and litigate these cases, but I think we will see billions recovered under these programs in the years ahead.”

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims. Click here for more information about the firm, and to submit your information electronically, or you may contact our office at 813-397-2300.

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300. – See more at: