Government Fraud Recoveries Would Make "Honest Abe" Proud

Last week, the Department of Justice (DOJ) announced its annual False Claims Act (FCA) recovery statistics. According to Acting Associate Attorney General Tony West, in fiscal year 2012, DOJ’s Civil Division recovered nearly $5 billion ($4.959 billion) in settlements and judgments under the FCA, exceeding the previous one-year record by $1.7 billion. The total includes $3 billion recovered in health care fraud cases and $1.4 billion recovered in housing and mortgage-related cases.

The total amount recovered under the FCA since 1986, when the law was substantially strengthened by amendments sponsored by Senator Chuck Grassley (R-Iowa) and Representative Howard Berman (D-Calif.), now stands at $35 billion.

Some of the more notable FCA recoveries during FY 2012:

  • GlaxoSmithKline: $3 billion settlement of investigations into its drug marketing and Medicaid pricing practices
  • Merck: $950 million civil-criminal settlement related to the promotion and marketing of its Vioxx pain medication
  • McKesson: $341 million federal-state settlement of allegations that it defrauded Medicaid by inflating the prices of its drugs
  • Deutsche Bank: $202.3 million mortgage fraud settlement
  • ATK Launch Systems: $37 million settlement of a whistleblower lawsuit alleging the company sold defective flares to the U.S. Army and Air Force
  • Maersk Line Limited: $31.9 million settlement of claims that it overcharged on contracts to transport cargo to U.S. troops in Afghanistan and Iraq

The Project On Government Oversight’s Federal Contractor Misconduct Database currently contains at least 185 False Claims Act instances, accounting for more than $9.3 billion in fines, penalties, and settlements since 1995.

The variety of claims covered in the above cases attests to the FCA’s versatility and far-reaching impact. As Principal Deputy Assistant Attorney General Stuart Delery explained at last week’s announcement:

[F]raud against the government is not just a problem that affects us as taxpayers. It is a problem that affects us as parents and as patients. It puts service members and law enforcement officers at risk. It is an epidemic that plagues every aspect of our daily lives.

The FCA—also known as the “Lincoln Law”—was enacted to address contracting corruption during the American Civil War. Next year will mark its 150th anniversary.