DOJ Recovered More Than $2.8 Billion Under False Claims, Whistleblower Acts In 2018

The U.S. government recovered nearly $3 billion in the 2018 fiscal year, from civil cases involving fraud and false claims, including more than $2 billion arising from whistleblowers lawsuits that unmasking fraudulent schemes. 

The U.S. Department of Justice (DOJ) released a fraudulent claims recovery report for the last year, indicating that approximately $2.8 billion was recovered through civil penalties and judgments against those intentionally cheating the government and American taxpayers for personal gain.

Under the False Claims Act, the DOJ is tasked with investigating, litigating and prosecuting offenders who defraud government programs. The False Claims Act allows the government to impose civil remedies against individuals and businesses who attempt to fraudulently gain federal funds and property. The types of fraud investigated range from defense and national security to import tariffs, small business programs, healthcare and many others.

Of the recovered funds, $2.5 billion were due to fraud within the healthcare industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

According to the release, 2018 marks the ninth consecutive year the DOJ has recovered more than $2 billion in fraud settlements and judgments from the healthcare industry, highlighting an ongoing large scale problem. Aside from the $2.5 billion recovered to replenish federal funds, the Department has also recovered millions of dollars to pay back state Medicaid programs.

DOJ reports the largest recovery of 2018 came from the drug and medical device industry, in which $625 million was paid back to the government from AmericourceBergen Corporation due to allegations that they sought to circumvent important safeguards to preserve the integrity of the nation’s drug supply and profit from repackaging certain drugs supplied to cancer-stricken patients.

A large contributor to the DOJ’s fraud recognition are the qui tam provisions of the False Claims Act, more commonly known as the whistleblower protection provisions, which allow persons and entities with evidence of fraud against federal programs or contract to sue to the wrongdoer on behalf of the U.S. government. These types of lawsuits allow whistleblowers to recover monetary awards in successful cases where the government recovers funds lost to fraud.

DOJ’s report indicates that 645 whistleblower lawsuits were filed in 2018, averaging about 12 new cases every week. Of these cases, the government paid out $301 million to the individuals who exposed fraud and false claims by filing these actions.

“Whistleblowers have played a vital role in unmasking fraudulent schemes that might otherwise evade detection,” Assistant Attorney General Jody Hunt said in the press release.  “The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes.”