Consumer Fraud

False Claims Act whistleblower rewards exceeded $345 million last year

osha whistle False Claims Act whistleblower rewards exceeded $345 million last yearWhistleblower bounties exceeded $345 million in fiscal year 2013, more than 9 percent of the $3.8 billion recovered by the U.S. government in cases alleging fraud against government programs and agencies, the U.S. Justice Department announced.

The Justice Department attributed 76 percent of funds recovered under the U.S. False Claims Act ($2.9 billion) to cases in which whistleblowers were instrumental in exposing fraudulent activity and other wrongdoing. In this context, whistleblower rewards equaled nearly 12 percent of the recoveries.

Whistleblowers who file complaints under the U.S. False Claims Act receive a percentage of any funds recovered from companies and other entities that allegedly received government funds in a fraudulent or inappropriate manner.

The False Claims Act allows private individuals to sue on behalf of the U.S. government when they are witness to fraud, waste, abuse, and other wrongdoing. In exchange, whistleblowers receive up to 30 percent of the funds recovered. Most of the funds are recovered through settlement agreements.

The Justice Department said that 2013 was the fourth year in a row that False Claims Act recoveries collectively topped $3 billion – a strong indication that the Act has become, and will continue to be, one of the government’s most effective weapons in combatting fraud.

Sadly, the largest share of funds recovered in 2013 and in previous years came from health care and pharmaceutical companies that engaged fraudulent activities and practices. The U.S. recovered more than $2 billion in just two cases in which drug manufacturers promoted their drugs for unapproved off-label purposes and then billed Medicare and other government programs for the drugs. Other cases involved drug companies selling adulterated drug and care providers engaging in illegal kickback schemes to maximize their profits while putting patients at risk.

In several cases, health care providers participated in other fraudulent practices, such as overbilling Medicare, Medicaid, and TRICARE for patient care, or billing those programs for care that was unnecessary, excessive, or never given.

Medicare and other health care funds accounted for more than 68 percent of the $3.8 billion dollars recovered under the False Claims Act in 2013, the Justice Department said.

About $900 million of the total 2013 recoveries came from three cases of alleged government contractor fraud.


U.S. Justice Department