FOR IMMEDIATE RELEASE
FRIDAY, OCTOBER 23, 1998
WWW.USDOJ.GOV TDD (202) 514-1888
JUSTICE DEPARTMENT RECOVERS MORE THAN $2 BILLION
IN FALSE CLAIMS ACT AWARDS AND SETTLEMENTS
WASHINGTON, D.C. -- The Department of Justice announced today it has recovered more than $2 billion in civil fraud cases brought under the whistle blower provisions of the False Claims Act, since the Act was amended in 1986. Half of the recoveries have come in the last three years.
"By 1995, we had recovered $1 billion in civil fraud cases brought under the whistle blower provisions of the False Claims Act," said Frank W. Hunger, Assistant Attorney General for the Civil Division. "Just three years later, those recoveries now exceed $2 billion."
The False Claims statute allows an individual, known as a "relator," to file suit on behalf of the United States alleging that false or fraudulent claims have been submitted to the government. The United States has a period of time to investigate the allegations to determine whether to take over the suit or to allow the relator to pursue it alone. Persons who file qui tam suits may recover from 15 to 25 percent of the settlement or judgment if the United States litigates the case, or up to 30 percent if they pursue it on their own.
Since the 1986 amendments, the number of qui tam suits filed has risen from 33 in fiscal year 1987, to 534 in fiscal year 1997. More than 2,400 qui tam suits have been filed with more than $2.249 billion in total recoveries: $2.189 billion in cases that the government pursued and $60 million in cases litigated by the relator. Whistle blowers have received about $300 million, with additional awards pending.
Hunger praised the work of Senator Charles Grassley of Iowa and Representative Howard L. Berman of California, who sponsored the 1986 whistle blower provisions. The provisions, also known as the qui tam amendments to the False Claims Act, significantly strengthened the statute by specifically recognizing and approving the fact that false Medicare, Medicaid and other similar programs claims are held to be within the ambit of the False Claims Act.
"The False Claims Act and its qui tam provisions have provided a remarkable return for the taxpayers of this country," said Hunger. "The recovery of more than $2 billion demonstrates that the public-private partnership encouraged by the statute works and is an effective tool in our continuing fight against the fraudulent use of public funds."
The qui tam amendments have succeeded in encouraging private citizens to come forward with information about fraud against the federal government," said Hunger.
Among the recoveries contributing to the "second billion" are:
In July, Health Care Service Corporation (HCSC) agreed to pay the United States $140 million for false claims in connection with its contract with the Department of Health and Human Services to process Medicare claims. HCSC is one of the nation's largest such contractors, known as Medicare carriers.
In 1997, the Department, joined by several state attorney general offices, settled claims against SmithKline Beecham Clinical Laboratories for $325 million. These claims included three qui tam suits.
In other lab cases, the Justice Department recovered $113,840,776 against Roche Biomedical Laboratories, and $80,895,722 against Damon Clinical Laboratories.
Although the majority of qui tam suits involve health care fraud, most notably against Medicare which is administered by HHS, whistle blower suits have involved fraud against a wide range government agencies.
The Justice Department is pursuing a series of qui tam actions on behalf of the Department of Interior against oil companies alleged to have under reported and underpaid royalties for oil produced on Federal and Indian lands. One of the companies, Mobil Oil Corporation, recently agreed to pay the United States $45 million.
And in a Defense Department qui tam case, Hercules, Inc., has paid the United States $26,260,000.
"These recoveries could not have been achieved without the outstanding and tireless efforts of the attorneys in the Civil Division and the U.S. Attorneys' offices throughout the country working in cooperation with agency investigators," Hunger stressed.