The Department of Justice announced yesterday that it obtained more than $4.7 Billion in settlements and judgments from cases involving fraud against the government. This amount marks the third highest annual recovery in the history of the False Claims Act (FCA). The FCA brings in a yearly average of $4 billion with a total of $53.1 billion recovered since 1986.
The FCA, enacted 1863, was modernized in 1986 when Senator Chuck Grassley authored amendments to the qui tam provision of the law. The qui tam provisions allow private citizens to file lawsuits against government contractors alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower is eligible to receive up to 30 percent of the monies recovered.
“The qui tam provisions provide a valuable incentive to industry insiders who are uniquely positioned to expose fraud and false claims to come forward despite the risk to their careers,” said Principal Deputy Assistant Attorney General Mizer. “This takes courage, for which they are justly rewarded under the Act.”
The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under a wide range government programs and contracts. Since the 1986 amendments most lawsuits brought under the FCA are filed using these whistleblower, or qui tam, provisions.
Whistleblowers filed 702 qui tam suits in fiscal year 2016, and the Department recovered $2.9 billion in these and earlier filed suits this past year. Whistleblowers were awarded $519 million by the government in 2016. From January 2009 to the end of fiscal year 2016, the government recovered nearly $24 billion in settlements and judgments related to qui tam suits and paid more than $4 billion to whistleblowers.
“This is further evidence that whistleblowing can work,” said David Colapinto, a partner with Kohn, Kohn & Colapinto, LLP, who handles False Claims Act cases. “Based on this record of success the False Claims Act has proven to be the most effective whistleblower law in history,” he said.
The False Claims Act whistleblower provisions have been used to combat fraud by government contractors and grantees in virtually every sector of the economy, from fighting healthcare fraud in Medicare, Medicaid and Tricare to defense and government procurement contracting fraud. If government funds are involved and there is fraud against the government there is a good chance the False Claim Act can be used as a tool to recover money for taxpayers.