The Justice Department released their 2014 whistleblower award figures yesterday. Whistleblowers under the federal False Claims Act took home $435 million in award money this year. (The government’s fiscal year ended on September 30th). These figures don’t include the millions paid by the IRS, SEC and under the FIRREA statute. All four programs pay whistleblowers for information about fraud or illegal conduct.
The Justice Department released data just on the False Claims Act this week. Let’s look at the numbers:
Whistleblower lawyers filed 713 False Claims Act cases last year. That is down from 754 the year before and the first time filings have been down since 2007.
Some of the larger cases settled or resolved last year include:
JP Morgan Chase – $615 million.
Sun Trust Bank – $430 million.
US Bank – $200 million.
And the largest of them all, Bank of America – $1.9 billion.
The cases against the banks were much larger but much of those recoveries were allocated to FIRREA, the Financial Institutions Reform Recovery and Enforcement Act. That law also pays whistleblower awards but those were not included in the Justice Department tallies.
In recent years prosecutors have favored FIRREA over the False Claims Act in bank prosecutions because of a much longer statute of limitations period. The FIRREA law allows prosecutors to look back 10 years whereas the False Claims Act is more limited.
Whistleblower lawyers prefer the False Claims Act because the awards are not capped. Only federally insured banks are subject to FIRREA.
Non-bank whistleblower cases also netted big recoveries this year.
Johnson & Johnson – $1.1 billion for off label drug marketing.
Omnicare – $120 million for nursing home kickbacks.
Amedisys – $150 million for Medicare billings involving unnecessary home health care.
Community Health Systems – $98 million for unnecessary hospital admissions.
Halifax Medical Center – $85 million for improper billings.
Hewlett – Packard – $30 million for problems with a Postal Service contract.
Boeing – $20 million for improper billings to the Air Force.
In announcing the numbers and recoveries, Acting Associate Attorney General Stuart Delery said, “In the past three years, we have achieved the three largest annual recoveries ever recorded under the statute. This sustained success demonstrates that these figures result not only from large individual matters, but from a continuous commitment year after year to pursue those who defraud taxpayers and to remain vigilant in identifying those who would unlawfully obtain money from the federal fisc.”
The federal False Claims Act was originally enacted during the Civil War during the presidency of Abraham Lincoln. The law was revitalized by Congress nearly 30 years ago and is now one of the most potent anti-fraud tools in the government’s arsenal.
The Act provides for triple damages and is available in any situation where someone defrauds the government or a government funded program. The big settlements against the banking industry primarily involve residential mortgages and how they were marketed. Because the government backs the guaranties of Fannie Mae and Freddie Mac, the two largest mortgage guaranty agencies, fraud against those entities is also eligible for inclusion under the False Claims Act.
Whistleblowers and their lawyers love the False Claims Act because the law allows awards of up to 30%. To be eligible for an award, a whistleblower must provide original source information and must file a lawsuit under seal in a U.S. District Court.
We are proud to represent whistleblowers in several, billion dollar cases. If you have inside, original source information about fraud involving government funds or programs, talk to us. For more information, contact attorney Brian Mahany at firstname.lastname@example.org or by telephone at (414) 704-6731 (direct).