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2013 Proves Great for Whistleblowers

The False Claims Act has long stood as the benchmark in legislation to both protect and inform the whistleblower. (For a deeper explanation of the False Claims Act, see the previous post regarding it)  Since the expansion of the law through recent…

2013 Proves Great for Whistleblowers

The False Claims Act has long stood as the benchmark in legislation to both protect and inform the whistleblower. (For a deeper explanation of the False Claims Act, see the previous post regarding it)  Since the expansion of the law through recent legislation such as the Fraud Enforcement and Recovery Act (2009) and the Affordable Care Act (2010), the government has continually seen an increase in successful whistleblower litigation against illegal activity.  Furthermore, whistleblowers have thrived more than ever due to new and stronger protection and greater rewards for their cooperation and information in investigations.
The Department of Justice recently announced that in the year 2013, the federal government took in a whopping $3.8 billion in settlements under the False Claims Act.  About $2.9 billion of it was taken in through qui tam provisions, meaning that over 75% of the money was recovered by means of whistleblower assistance.  Whistleblowers filed 752 lawsuits in 2013, almost doubling the 433 filed just four years ago in 2009.  These staggering numbers support the federal government’s claim that it is laying down the law on businesses that engage in illegal activity.  Whistleblowers received $345 million in bounties in 2013, an astronomical number that represents about 11% of all money recovered under qui tam provisions.  An increase in the bounty available to whistleblowers, combined with greater protection against retaliation from the offending companies, has incentivized whistleblowing like never before.
What’s more, and perhaps linked to the efforts of the Obama Administration,  $2.6 billion of the recovered funds resulted from the health care sector.  This points to the pledge made by the administration with the passing of the Affordable Care Act that it would strike back against health care fraud in programs such as Medicare and Medicaid.  In each year since 2010, the amount recovered in that sector has surpassed $2 billion.

One interesting change in 2013 from past years is the government’s decrease in its quantity of cases it takes on.  While the numbers continue to be high for amounts recovered, the government has its eyes set on the biggest mishaps, raking in as much as $664 million in one case involving the Air Force and a government contractor.  Some experts point to this as a way of sending a message that no one can wrong the government through false claims without paying a price, while others believe that it may make smaller entities feel that their potential fraudulent activity will go unnoticed or unaddressed.  Regardless of the varying opinions on the details, the facts remain that the government is doing its part in making False Claims Act litigation a common and profitable occurrence.

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