THE FEDERAL FALSE CLAIMS ACT CONTINUES TO BE THE GOVERNMENT’S BEST WEAPON IN COMBATING FRAUD AGAINST GOVERNMENT PROGRAMS, GENERATING $3.5 BILLION IN RECOVERIES DURING THE FISCAL YEAR 2015.
It was another great year for the False Claims Act. The United States Department of Justice released their statistics for the fiscal year 2015 and announced that the Government recovered more than $3.5 billion from False Claims Act cases of which more than $2.8 billion was recovered from cases filed under the qui tam provisions of the False Claims Act.
The qui tam provisions of the False Claims Act allow an individual to file a civil lawsuit on behalf of the Government against individuals or corporations who have defrauded the Government. If the case is successful, the individual filing the suit, also called a relator or whistleblower, can be awarded between 15% and 30% percent of the recovery. In the fiscal year 2015, the Government awarded more than $597 million to whistleblowers, a new record.
Qui tam lawsuits continue to be a powerful weapon for the Government. Between January 2009 and the end of the fiscal year 2015, the Government recovered $19.4 billion from qui tam lawsuits and awarded $3 billion to whistleblowers. More and more whistleblowers are coming forward and exposing fraud committed on the Government, and this year was no different.
“Many of the recoveries obtained under the False Claims Act result from courageous men and women who come forward to blow the whistle on fraud they are often uniquely positioned to expose,” according to Principal Deputy Assistant Attorney General Benjamin C. Mizer.
The Government Recovers More Than $1.9 Billion in Healthcare Fraud Cases, More Than $330 Million Awarded to Whistleblowers.
Healthcare Fraud continues to be the largest source of recovery for the Government. In the fiscal year 2015, the Government recovered more than $1.9 billion from companies and individuals who defrauded Federal programs such as Medicare and Medicaid and awarded more than $330 million to whistleblowers for exposing the fraud. There are many different types of Healthcare Fraud, but some of the most common schemes include billing for unnecessary treatment, fraudulent coding, and violating certain laws and regulations such as the Anti-Kickback Statute and the Stark Law.
One major case was a $450 million settlement in which DaVita Healthcare Partners, Inc. agreed to pay to resolve allegations related to the administering of dialysis medication. The Centers for Medicare and Medicaid Services (“CMS”) reimburses dialysis providers for excess dialysis medication and DaVita Healthcare Partners, Inc. purposely created unnecessary excess dialysis medication in order to receive more money from the Government. The two whistleblowers, a physician and a nurse brought the case through a qui tam lawsuit.
A second major case was a $250 million settlement, of which $216 million was recovered in the fiscal year 2015, consisting of 70 separate settlements and 457 hospitals agreeing to pay to resolve claims related to implantable cardioverter defibrillators. The hospitals routinely violated CMS guidelines by implanting defibrillators in patients who did not meet the criteria in order to receive reimbursement. Two whistleblowers, a health care reimbursement consultant, and a cardiac nurse, brought the case through a qui tam lawsuit naming most of the defendants in the case.
Billions of tax dollars are spent each year on healthcare programs. Whistleblowers are needed to stop companies and individuals from defrauding these programs to assure the money goes to helping people, not making profits.
The Government Recovers More Than $258 Million in Defense Contracting Fraud Cases, More Than $25 Million Awarded to Whistleblowers.
Defense Contracting Fraud was another major source of recovery. In the fiscal year 2015, the Government recovered more than $258 million in Defense Contracting Fraud cases and awarded more than $25 million to whistleblowers for exposing the fraud. There are many different types of Defense Contracting Fraud, but some of the most common schemes include providing faulty products to the military and overcharging the Government for goods and materials.
One major case was a $101 million settlement in which Supreme Group B.V. and its subsidiaries agreed to pay to settle allegations that they knowingly overcharged the Government and the military in Afghanistan for food and water in order to make a profit. The whistleblower, a former executive, brought the case through a qui tam lawsuit. The scheme also resulted in a criminal settlement of $288.36 million.
The men and women who fight for America’s freedom rely on defense contractors to provide everything from food and water to jets and helicopters. Companies and individuals that defraud the Department of Defense put that freedom at risk, and it requires whistleblowers to come forward and protect that freedom by exposing their fraud.
The Government Recovers More Than $1.3 Billion in Other Fraud on Government Program Cases, More Than $241 Million Awarded to Whistleblowers.
While the Department of Justice only categorizes its statistics into three categories, recoveries from fraud committed on the United States Department of Health and Human Services, the United States Department of Defense, and other Federal programs, the “other” category still generates a high rate of recoveries for the Government. In the fiscal year 2015, the Government recovered more than $1.3 billion in various cases involving Fraud on Government Programs and awarded more than $241 million to whistleblowers who exposed the fraud. Fraud on any Government Program can result in a False Claims Act case, and whistleblowers are still in the best position to expose that fraud.
In the fiscal year 2015, one major case was a $13 million settlement in which Education Affiliates, an education company in Maryland, agreed to pay to settle allegations that it falsified student information to induce the Government into paying for student aid. The five whistleblowers brought the case through a qui tam lawsuit.
As the statistics show, whistleblowers that bring these cases and expose fraudulent activity continue to be the Government’s best weapon against fighting fraud.
If you have evidence of a corporation or individual defrauding the Government for more than $10 million through Healthcare Fraud, Defense Contracting Fraud, or other types of Fraud on Government Programs, contact the whistleblower attorneys at Levy Konigsberg, LLP to discuss your case.