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Whistleblowers were key in $2.8 billion False Claim Act recoveries

The Department of Justice reports that it recovered $2.8 billion in fraud prosecutions in 2018 under the False Claims Act. The majority of those cases came to the DOJ's attention through the courage of whistleblowers.

Passman & Kaplan, P.C., represents government whistleblowers who have suffered retaliation and also shepherds whistleblowers (civilians and federal employees) in bringing lawsuits under the False Claims Act to claim a reward. Read more about federal fraud recoveries and how our law firm supports individuals who expose government corruption.

An effective tool against government fraud

The False Claims Act provides financial incentives to whistleblowers, who often suffer personally for reporting wrongdoing. Eligible whistleblowers are entitled to a healthy percentage of any money recovered by federal prosecutors. The legislation has been highly successful in exposing government fraud, waste and graft, and recovering money on behalf of U.S. taxpayers. The program more than pays for itself, even after millions of dollars in payouts to whistleblowers.

In 2018, the DOJ recovered $2.8 billion from False Claims Act cases. The bulk of those cases involved the health care system, namely fraudulent billing and corruption in the pharmaceutical and medical device industries. Among the major recoveries were $625 million from AmerisourceBergen for illegally repackaging cancer drugs, $270 million from a California physicians association for a massive Medicare scam, and $210 from drug manufacturer United Therapeutics for unlawful kickbacks to doctors.

A good year, though not as good as the previous year

Some analysts contend the current administration is notably soft on white collar crime. Others characterize it as a shift in priorities as to which types of fraud prosecutions the Department of Justice pursues, namely a crackdown on health care fraud. Either way, recoveries under the False Claims Act actually declined in 2018. Despite an uptick in health care fraud recoveries, the overall take was down from $3.4 billion in 2017.

Fraud prosecutions and whistleblower lawsuits can take several years to filter through the system. The decline may be a one-year anomaly, skewed by a handful of bigger recoveries in 2017. Or it may signal that the DOJ is indeed less aggressive on other types of cases such as securities fraud or defense contracting fraud. Time will tell.

Whistleblowers are rewarded under the False Claims Act

Despite whistleblower protections under federal law, those who expose fraud and illegal conduct are regularly subjected to termination, demotion, transfers or a hostile work environment. Passman & Kaplan has a nationwide reputation for representing federal employees in whistleblower retaliation litigation.

The False Claims Act recognizes the sacrifices and encourages whistleblowing by providing a substantial monetary reward to those who report fraud against the U.S. government. The legal mechanism is known as a qui tam action (a lawsuit on behalf of the federal government). If the qui tam lawsuit results in a successful prosecution, whistleblowers receive 10 to 30 percent of the recovered funds.

The DOJ acknowledges that three-fourths of the 2018 recoveries under the False Claims Act ($2.1 billion worth) were initiated by whistleblowers. Without those individuals coming forward, the government may not have learned of the fraud or may not have been nearly as successful in clawing back the ill-gotten gains. Passman & Kaplan is proud to aid the war on taxpayer fraud, but more importantly proud to protect the rights of those who dare to expose wrongdoing. We have helped numerous whistleblowers bring qui tam actions, including dealing with any retaliatory fallout.

 

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