Department of Justice Seal

FOR IMMEDIATE RELEASE

CIV

THURSDAY, FEBRUARY 24, 2000

(202) 514-2007

WWW.USDOJ.GOV

TDD (202) 514-1888


JUSTICE DEPARTMENT RECOVERS OVER $3 BILLION IN WHISTLEBLOWERS

FALSE CLAIMS ACT AWARDS AND SETTLEMENTS


WASHINGTON, D.C. -- More than $3 billion has been recovered in civil fraud cases brought under the whistleblower provisions of the False Claims Act, since the law was amended in 1986, the Justice Department announced today. Almost half of the recoveries have come in the last two and a half years. "It took us 12 years -- to the end of fiscal year 1998 -- to recover $2 billion in civil fraud cases brought under the whistleblower provisions," said Acting Assistant Attorney General David W. Ogden for the Civil Division. "We have reached the $3 billion mark just 16 months later." Ogden stressed that besides providing monetary recovery, the whistleblower suits have also had a deterrent effect among recipients of federal funds. The False Claims statute allows private persons, known as "relators," to file suit on behalf of the United States alleging that false or fraudulent claims have been submitted to the government. Persons who file qui tam suits may recover from 15 to 25 percent of the settlement or judgment if the federal government intervenes in the case, or up to 30 percent if they pursue it on their own. More than 3000 such suits have been filed since 1986. The number of qui tam suits filed has risen from 33 per year in the year after 1986 to 483 in the last fiscal year. The whistleblower provisions have yielded recoveries of more than $3.5 billion to date: $3.3 billion in cases that the Department of Justice pursued and $211 million in cases litigated by whistleblowers after the Department of Justice declined to pursue the case. The Department of Justice has paid whistleblowers more than $550 million as their statutory shares, with additional awards pending. "The False Claims Act's qui tam provisions have provided a remarkable return for the taxpayers of this country," said Ogden. "The Department of Justice's recovery of more than $3.3 billion through whistleblower suits 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." Among the most recent recoveries are:

  • National Medical Care, now also known as Fresenius Medical Care, North America, the largest provider of dialysis services in the United States, agreed to pay $375 million to resolve qui tam allegations that the company submitted false claims for laboratory tests and conspired to pay illegal kickbacks. This is the largest civil recovery in a health care fraud case.
  • Beverly Enterprises Inc., the nation's largest operator of nursing homes, agreed to pay $170 million to settle allegations that it defrauded Medicare by fabricating records to make it appear that nurses were devoting much more time to Medicare patients than they actually were.
  • Olsten Corporation paid $40.9 million to settle allegations that Olsten and Columbia/HCA had disguised unallowable acquisition costs as allowable management fees when Columbia/HCA acquired home health agencies in several states. Olsten and its subsidiaries had provided management and staffing services for the home health agencies.

While almost half of the qui tam filings, and more than half of the qui tam recoveries, involve health care fraud, whistleblower suits have alleged fraud against a wide range of federal government agencies. For example:

  • Chevron Corporation agreed to pay the U.S. $86.2 million to resolve whistleblower claims under the False Claims Act that the corporation and affiliated companies underpaid royalties due for oil produced on federal and Indian leases since 1988.
  • Mobil Oil Corporation agreed to pay the U.S. $45 million, and Oxy-USA, Inc. paid $7.3 million, to resolve similar claims of underpayment of royalties.

Ogden praised the work of Senator Charles Grassley of Iowa and Representative Howard L. Berman of California, who sponsored the 1986 amendments that made it easier for such cases to be filed. He also stressed that the recoveries could not have been achieved without the outstanding and tireless efforts of the attorneys in the Civil Division and the United States Attorneys' offices throughout the country working in cooperation with agency investigators.

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