The Commercial Litigation Branch, Fraud Section works with United States Attorneys’ Offices (USAOs) nation-wide to litigate cases involving financial fraud against the Federal Government. The Fraud Section’s largest caseload concerns fraud against federal healthcare programs – primarily Medicare and Medicaid. However, Fraud Section attorneys operate a diverse practice addressing all types of fraud against all federal agencies. Fraud Section attorneys handle cases involving fraud in the procurement of weapons systems and other goods and services by the Department of Defense. Fraudulent activity related to research grants, subsidy programs, federal building construction, government equipment and information technology purchases, and foreign aid all fall within the Fraud Section’s bailiwick. The Fraud Section effectively serves as the outside fraud litigation counsel to all Federal Government agencies.
In addition to fraud litigation, a significant portion of the Fraud Section’s practice includes investigating fraud allegations. In its fraud investigation efforts the section works closely with the Department of Justice’s Criminal Division, USAOs, the Federal Bureau of Investigation, and the Offices of the Inspectors General of the Fraud Section’s client agencies. Typically, the Fraud Section files its suits under the False Claims Act, a federal statute originally enacted in response to defense contractor fraud during the American Civil War (1861-1865).
The False Claims Act allows private citizens to file suits on behalf of the government (called "qui tam" suits) against those who have defrauded the government. Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery. Many Fraud Section investigations and lawsuits arise from such qui tam actions.
Fraud Section attorneys litigate causes of action beyond fraud, including illegal kickbacks, conflicts of interest, and bribery. The government’s remedies in these cases include civil penalty provisions attached to criminal statutes, common law theories, and the False Claims Act. These cases frequently involve close coordination with government criminal attorneys.
The Fraud Section litigates many of the Civil Division's highest stakes cases, in money terms. Working with United States Attorneys throughout the country, Frauds Section attorneys have recovered nearly $1.8 billion in each of the past seven years from individuals and corporations who have defrauded the government. Since 1986, the Fraud Section, in close collaboration with USAO attorneys, has recovered over $20 billion in settlements and judgments.
Examples of recent cases brought by the Fraud Section include those alleging deceptive or illegal marketing practices by pharmaceutical manufacturers; defense contractors selling defective goods and services to the military; hospitals and other health care providers submitting false Medicare and Medicaid claims; unscrupulous contractors exploiting national disasters such as Hurricane Katrina; and mortgage brokers violating government lending program rules and, in so doing, exploiting unsuspecting new homeowners.
The Fraud Section houses the Elder Justice and Nursing Home Initiative, which supports enhanced prosecution and coordination at federal, state, and local levels to fight abuse, neglect, and financial exploitation of the nation’s senior and infirm population. Through this initiative, the government enforces the False Claims Act against nursing facilities and other long term care providers that knowingly bill Medicaid or Medicare for services that were not provided or that were so deficient as to render them worthless. The initiative also offers grants to promote prevention, detection, intervention, investigation, and prosecution of elder abuse and neglect, and to improve the scarce forensic knowledge in the field.