In fiscal year 2011, the federal government brought in approximately $3.03 billion in False Claims Act recoveries, bringing the total to more than $8.7 billion over the last three years.
According to an analysis by Gibson Dunn, 2011 was the second year in a row that False Claims Act recoveries broke the $3 billion mark and the third-largest yearly recovery amount ever. The report credits the jump in recoveries to the Justice Department’s aggressive use of the False Claims Act as a fraud-fighting weapon, saying the Justice Department recovered approximately $5.6 billion in total criminal and civil fraud-related proceeds in 2011, more than double the amount recovered in 2008 and the largest single-year fraud recovery in the history of the Department.
The False Claims Act imposes penalties and triple damages against anyone who knowingly submits or causes the submission of false or fraudulent claims for payment of U.S. government funds or property, as defined by the Government Accountability Office.
According to Public Citizen, the biggest False Claims offender to emerge in the last two years is the pharmaceutical industry. The pharmaceutical industry now leads all industries, including the defense industry, in the total amount of settlements paid to the federal government under the False Claims Act.
Among the culprits, Maxim Healthcare Services, a leading provider of home health care services, agreed to pay $150 million to resolve criminal and civil charges relating to an alleged nationwide scheme to defraud Medicaid programs and the Veterans Affairs program.
In discussing the settlement, Assistant Attorney General Tony West noted, “while this resolution may be tough, it is fair and appropriate. And it’s particularly important at a time when we are all looking for ways to reign in government spending and save taxpayer dollars that we hold accountable those corporations who pad their bottom lines through fraud, waste and abuse.”
Between fiscal years 2008 and 2011, the Justice Department more than doubled fraud recoveries in twenty-one states and the District of Columbia, according to the Gibson Dunn report. In Maryland for example, from 2008 to 2011 civil and criminal fraud recoveries increased from approximately $4.3 million to approximately $109 million.
The report cites the Obama Administration’s “Campaign to Cut Waste,” and its ”relentless focus” on eliminating fraud and waste in government programs. ”Twenty-eight percent of the recoveries in the last 25 years were obtained since President Obama took office,” according to Assistant Attorney General West, which “reflect[s] the extraordinary determination and effort that this administration, and Attorney General Eric Holder in particular, have put into rooting out fraud, recovering taxpayer money and protecting the integrity of government programs.”
Learn about recent updates to the FCA and how to reduce risk from the Federal as well as State Civil FCA with our False Claims Act Webinar.