Justice Department Recovered Over $4.7 Billion From False Claims Act Cases in Fiscal Year 2016

The Department of Justice (DOJ) announced that it has obtained more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2016 (ending September 30). This is the third highest annual recovery in False Claims Act (FCA) history.  Since 2009, the total recovery amounted to $31.3 billion.  Of the $4.7 billion recovered, $2.5 billion came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories, and physicians. The $2.5 billion recovered in fiscal year 2016 reflects only federal losses.  In many of these cases, additional millions of dollars were recovered for state Medicaid programs.  This is the seventh consecutive year the Department’s civil health care fraud recoveries have exceeded $2 billion.

The DOJ also recovered nearly $1.7 billion from housing and residential mortgage fraud settlements and judgments this past fiscal year – the second highest annual recovery in the history of the federally insured mortgage program.

The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government programs and contracts, relating to such varied areas as health care, defense and national security, food safety and inspection, federally insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, disaster assistance, and import tariffs.  In 1986, Congress strengthened the FCA by amending it to increase incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government.

Most false claims actions are filed by whistleblowers under qui tam provisions of the FCA and the States False Claims Act analogs.  The laws provide for a whistleblower award up to 30 percent of the recovery.  Whistleblowers filed 702 qui tam suits in fiscal year 2016, and the DOJ recovered $2.9 billion in these and earlier filed suits this past year.  The government awarded the whistleblowers $519 million during the same period.

About Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, consumer class actions, shareholder derivative litigation and whistleblower (Qui Tam) litigation.  The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania.  Since its founding in 1995, Faruqi & Faruqi, LLP has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees. To schedule a free consultation with our attorneys and to learn more about your legal rights, call our offices today at (877) 247-4292.

About T. Talyana Bromberg

Talyana Bromberg is a partner in Faruqi & Faruqi, LLP’s Pennsylvania office and chair of its False Claims Litigation group.  Ms. Bromberg focuses her practice on representing whistleblowers in Medicare and Medicaid fraud cases, educational, financial, tax, defense contractors’ fraud and matters involving bribery under the Foreign Corrupt Practices Act.

Ms. Bromberg was a lead attorney representing whistleblower Ronald Streck in the lawsuits against pharmaceutical manufacturers AstraZeneca Pharmaceuticals LP, Cephalon, Inc., Biogen Inc., and Genzyme Corp.  relating to underpayment of Medicaid rebates, with  settlements totaling  over $59.8 million. She represented whistleblowers in pharmaceutical lawsuits against Abbott Laboratories related to off-label promotion and payment of kickbacks for anti-seizure drug Depakote that resulted in a $1.6 billion settlement; against GlaxoSmithKline related to unlawful marketing tactics and kickbacks for GSK drug Advair for a $1.04 billion settlement; and against Pfizer for alleged illegal promotion of its kidney transplant drug Rapamune, resulting in $257 million settlement.

The False Claims Act allows whistleblowers to sue those who commit fraud against the government and to receive between 15 and 30 percent of the recovered funds. The law covers fraud involving any government-funded contract or program, including Medicare, Medicaid, military, transportation, housing, educational, agricultural, or other program. Separate IRS, SEC and CFTC whistleblower programs cover federal tax fraud, securities and commodities fraud. Since 1986, whistleblowers have helped the government to recover more than $40 billion by bringing lawsuits under the federal and state False Claims Acts.

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