2016 False Claims Act Year in Review: Whistleblowers Collect $519 Million

Fiscal Year 2016 proved another strong year for the False Claims Act. With a total recovery of more than $4.7 billion this year, the Government has recovered more than $31 billion since 2009. Of the $4.7 billion recovered, $2.9 billion resulted from whistleblowers who filed qui tam actions under the False Claims Act.

The qui tam provisions of the False Claims Act allow a private person to file a lawsuit on behalf of the Government against companies and individuals who have defrauded the Government. If there is a successful recovery as a result of this lawsuit, the whistleblower is entitled to between 15% and 30% of the Government’s recovery.

According to Principal Assistant Attorney General Benjamin C. Mizer, “[t]he 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 . . . This takes courage, for which they are justly rewarded under the Act.” And rewarded they were. In Fiscal Year 2016, whistleblowers were rewarded $519 million for their courage to stand up for what’s right and exposing fraud against the Government.

Once again, settlements resulting from whistleblowers bringing qui tam cases were the dominant force behind False Claims Act settlements including these major victories:

  • A Pharmaceutical Fraud case where former pharmaceutical manufacturer Wyeth, currently owned by Pfizer, agreed to pay $784.6 million to resolve allegations that the company offered discounts to private hospitals on Protonix and other medications while charging the Government full price. The whistleblower was rewarded more than $98 million for bringing the qui tam case.
  • An Anti-Kickback Statute Violations case where hospital-chain Tenet Healthcare Corporation agreed to pay a total of $513 million to settle civil and criminal allegations that the company and four of its hospitals paid bribes and kickbacks to area prenatal clinics to refer the clinic’s mostly undocumented pregnant Hispanic patients to their hospitals. The whistleblower was rewarded more than $84 million for bringing the qui tam case.
  • An Education Fraud case where for-profit college company Education Management Corp. agreed to pay $95.5 million to resolve allegations that it violated Title IV and other statutes by paying admissions employees solely on their recruitment numbers. The whistleblowers were rewarded more than $11 million for bringing the qui tam case.

In an unprecedented move that is hopefully just the beginning, many individuals were found personally liable for False Claims Act violations including:

  • A Medicare Fraud case where George Hepburn and his company Dynasplint Systems Inc., agreed to pay $10.3 million to resolve allegations that Hepburn and his company improperly billed Medicare for splints in skilled nursing facilities. The whistleblower was rewarded more than $1.9 million dollars for bringing the qui tam case.
  • An Anti-Kickback Statute Violations and Stark Violations case where Dr. Jonathan Oppenheimer and his company Prost-Data, Inc. agreed to pay $9.35 million to resolve allegations that Oppenheimer and his company “donated” computer software to physicians in exchange for referrals. The whistleblower was rewarded more than $1.6 million for bringing the qui tam case.

These cases, and others like them, highlight the importance of the False Claims Act and other whistleblower statutes. Companies and individuals won’t stop defrauding the Government, and it takes whistleblowers to come forward to expose their fraud.

If you have knowledge and proof that a company or individual is committing Fraud on the Government through Healthcare Fraud, Government Contract Fraud, Mortgage Fraud, or Education Fraud, then give us a call today for a free consultation and case review with an experienced whistleblower attorney. To review your eligibility, contact the whistleblower attorneys at Levy Konigsberg, LLP for a free confidential consultation at 1-212-605-6200 or toll free at 1-800-988-8005.

 

 

 

Sources

https://www.justice.gov/opa/pr/justice-department-recovers-over-47-billion-false-claims-act-cases-fiscal-year-2016

https://www.justice.gov/opa/pr/wyeth-and-pfizer-agree-pay-7846-million-resolve-lawsuit-alleging-wyeth-underpaid-drug-rebates

https://www.justice.gov/opa/pr/hospital-chain-will-pay-over-513-million-defrauding-united-states-and-making-illegal-payments

https://www.justice.gov/opa/pr/profit-college-company-pay-955-million-settle-claims-illegal-recruiting-consumer-fraud-and

https://www.justice.gov/usao-edla/pr/splint-supplier-and-its-president-pay-over-10-million-resolve-false-claims-act

https://www.justice.gov/usao-mdtn/pr/former-ceo-physician-and-drug-testing-laboratory-pay-935-million-settle-false-claims

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