The U.S Department of Justice (DOJ) has recently reported that the U.S. has recovered $2.4 billion in settlements and judgments in fraud cases, for the fiscal year ending Sept. 30, 2009, of which over one billion was for health care fraud claims. The DOJ says this represents the second largest annual recovery of civil fraud claims historically, and brings total recoveries since 1986 to more than $24 billion.

The False Claims Act, 31 U.S.C. 3729 et seq., is a federal statute that enables liability for anyone who knowingly submits a false or fraudulent claim - up to triple damages and penalties ranging from $5,500 to $11,000 per claim. The statute was enacted in 1863, but was amended in 1986 to strengthen the statute's qui tam provisions, which allow whistle-blowers (plaintiffs known as "realtors") on fraud to initiate a lawsuit under the act on behalf of the United States.

"Rooting out fraud and safeguarding taxpayers from illegal conduct are among the Justice Department's highest priorities," Tony West, the Assistant Attorney General for the Civil Division, stated in a press release. "I applaud the dedication of the public servants who investigate and prosecute fraud, and the courage of the many private citizens who risk their careers by reporting fraud."

Nearly $2 billion of the settlements and judgments recovered this fiscal year were recovered under the qui tam provisions, and health care fraud recoveries were $1.6 billion of the total recovered. One of the major cases was a settlement with the state and city of New York for $540 million. Other large settlements were with Aventis Pharmaceuticals Inc., Bayer HealthCare LLC, Eli Lilly & Company and Quest Diagnostics Inc. and subsidiary Nichols Institute Diagnostics Inc.

West also expressed thanks to Senators Chuck Grassley (R-IA) and Patrick J. Leahy (D-VT) and Representative Howard Berman (D-CA) for support of the Fraud Enforcement and Recovery Act of 2009 that helped strengthen the False Claims Act, after courts had previously narrowed the scope of the law. "The 2009 amendments clarify the act and give the Justice Department a powerful tool in its efforts to pursue those who cause losses to the United States and harm to taxpayers."

Adapted in part from a DOJ press release.

Department of Justice press release:
http://www.justice.gov/opa/pr/2009/November/09-civ-1253.html

More information on the False Claims Act: http://www.justice.gov/usao/pae/Documents/fcaprocess2.pdf

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