Whistleblowers Paid $439M From False Claims Act Lawsuits in 2012

The federal government reports that it has collected nearly $5 billion through whistleblower lawsuits in 2012, with about $439 million of the money recovered paid to whistleblowers who brought the claims forward. 

The Department of Justice (DOJ) itself took in about $3.3 billion in 2012, through settlements and fines imposed under the False Claims Act, which allows the government to pursue companies for fraudulent acquisition of federal funding.

Under the qui tam provisions of the act, whistleblowers who expose the fraud by revealing information not publicly accessible are entitled to a portion of the money recovered. Whistleblowers must be the first to bring the case to the government’s attention and not publicize the lawsuit until the Department of Justice decides whether to join the prosecution of the case.

The largest whistleblower lawsuit settlement this year was against GlaxoSmithKilne, which paid $1.5 billion in False Claims Act fines for off-label marketing of drugs for uses that werenot approved by the FDA. That was part of a larger settlement over the company’s practices, which totaled about $3 billion.

The case stemmed from a whistleblower lawsuit filed by former Glaxo employees, who received a total of $131 million for bringing the case.

According allegations raised, GlaxoSmithKline illegally promoted their blockbuster antidepressant drug Paxil for treating depression in children from April 1998 to August 2003. However, the FDA had not approved it for use by anyone under the age of 18.

“In addition to the record-breaking amounts of money recovered for the taxpayers over the past four years, it is important that we not lose sight of the fact that the individual cases that are rolled up in these numbers have a real effect on individual people,” said Principal Deputy Assistant Attorney General Stuart Delery at a press briefing. “These cases involve a risk of harm to children and seniors, like in the cases against GlaxoSmithKline and other pharmaceutical companies that marketed their products for uses that were never approved by the FDA, undermining quality care and patient safety.”

Mortgage and housing fraud were also large contributors to this year’s total, which far exceeded last year’s take of about $3.2 billion total from False Claims Act settlements and fines.

Since January 2009, DOJ has collected a total of $13.3 billion through fraud charges for the federal government and whistleblowers.