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Presented by Hodgson Russ, the Whistleblower Blog is written by a team of lawyers experienced in successfully guiding both whistleblowers and companies accused by whistleblowers of wrongdoing through the False Claims Act process.

Government Statistics Show Upward Trend in False Claims Act Settlements

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Data released by the U.S. Department of Justice reveal a substantial increase in False Claims Act recoveries over the past two years. These statistics, along with comments from Department of Justice officials, indicate that the False Claims Act whistleblower provisions have become the government’s tool of choice in attacking fraud, particularly in the health care and pharmaceutical industries.

During fiscal year ending September 30, 2011, the Department of Justice secured more than $3 billion through settlements and judgments in civil cases involving fraud against the government. This marked the second year in a row where the Department of Justice reached or exceeded $3 billion. Since January 2009, the Department of Justice has recovered approximately $8.7 billion. This is the largest three-year total in the Justice Department’s history.

Of the $3 billion total recovery for fiscal year 2011, $2.8 billion was secured under the whistleblower provisions of the False Claims Act. And $2.4 billion of the total annual recovery was attributable to fraud committed against federal health care programs, such as Medicare and Medicaid. Since January 2009, the Department of Justice has used the False Claims Act to recover more than $6.6 billion in federal health care dollars.

At the end of last year, Assistant Attorney General Tony West thanked the “courageous citizens” who reported fraud under the whistleblower provisions of the False Claims Act: “We are tremendously grateful to whistleblowers who have brought fraud allegations to the government’s attention and assisted us in the public-private partnership to fight fraud.”

Many of the 2011 False Claims Act cases based on health care fraud were accompanied by criminal investigations. The Department of Justice obtained 21 criminal convictions and approximately $1.3 billion in criminal fines, forfeitures, restitution, and disgorgement under the Food, Drug and Cosmetic Act during 2011.

Fiscal year 2010 saw similarly impressive recoveries. The government secured approximately $2.5 billion in health care fraud settlements/judgments. According to the Department of Justice, “most of the cases resulting in recoveries were brought to the government by whistleblowers under the False Claims Act, the federal government’s primary weapon in the battle against fraud.”

The Department of Justice believes that the 2010 spike in recoveries for health care fraud was fueled, at least in part, by the creation of a new interagency task force, the Health Care Fraud Prevention and Enforcement Action Team, which was designed to increase coordination and optimize criminal and civil enforcement among the Department of Health and Human Services and the Department of Justice.

If the trend continues, 2012 could be a year of unprecedented False Claims Act recoveries.

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Hodgson Russ is one of only a few major law firms that represents both whistleblowers and companies accused by whistleblowers of wrongdoing. This unusual perspective means we are exceptionally well positioned to advise whistleblowers about potential claims.

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