My name is Tony West, and I’m the Assistant Attorney General for the Civil Division of the Department of Justice. In that capacity I oversee much of the federal government’s civil litigation across the country, including the Justice Department’s efforts to recapture billions of taxpayer dollars lost to fraud. As part of those efforts, since January 2009 we have made it a top priority – in close collaboration with the Department of Health and Human Services – to crack down on health care fraud.
Today, we are here to announce the latest - and one of the largest - results of those efforts. The pharmaceutical manufacturer Allergan has agreed to plead guilty and pay $600 million to resolve serious criminal and civil fraud allegations. For nearly a decade, Allergan illegally promoted Botox for uses that were not approved as safe and effective by the Food and Drug Administration, including pain, headache, spasticity, and juvenile cerebral palsy. Allergan also paid kickbacks to induce physicians to inject Botox for off-label uses. Allergan also taught doctors how to bill for off-label uses, including coaching doctors on how to miscode Botox claims, leading to millions of dollars of false claims being submitted to federal and state government programs like Medicare and Medicaid.
These are not victimless crimes. When our public health care programs are burdened with fraudulent charges, it drives the cost of health care up for all of us – consumers pay more in premiums; companies pay more to cover their employees. And when a pharmaceutical manufacturer violates the integrity of the drug approval process established by Congress and the FDA by paying kickbacks to encourage the off-label use of an unapproved drug, that not only undermines the judgments of health care professionals; it also threatens to put patients’ health and safety at risk.
That’s why fighting health care fraud is a top priority for the Obama Administration, for Attorney General Eric Holder and for me. And that is why President Obama created the Health Care Fraud Prevention and Enforcement Action Team, or HEAT, in May 2009. Chaired by Attorney General Holder and Secretary Kathleen Sebelius, HEAT has allowed both HHS and the Justice Department to bring the full weight of the federal government resources to bear against individuals and corporations committing health care fraud. Since February 2009, we have recouped over $3 billion in taxpayer funds in health care fraud cases through use of the False Claims Act. In fact, last year the Justice Department also reached an all-time high in the number of health care fraud defendants charged, with more than 800 indictments and more than 580 convictions.
Now, the size of today’s settlement is impressive, to be sure. But more important is what these results say about the U.S. government’s coordinated efforts to protect the integrity of programs like Medicare and Medicaid on which millions of American rely everyday.
And successful collaborations such as this one aren’t just limited to the Justice Department’s fight against health care fraud; our interagency, federal and state commitment extends to other areas where we are tackling fraud on the taxpayers. For example, our efforts aimed at fraud in the housing and mortgage industries have increased recoveries in this arena from $15.7 million in 2007 and 2008 to $53 million from January 2009 to the end of July 2010.
Our commitment also extends to rooting out fraud in connection with the procurement of goods and services used by our military and civilian agencies. Since January 2009, procurement fraud cases have accounted for approximately $665 million in recoveries – nearly $200 million more than the Department’s recoveries in 2007 and 2008 combined. Investigations into other alleged wrongdoing in connection with procurement fraud are active and ongoing.
We’ve also increased our recoveries in government grant fraud cases, from $19 million in 2007 and 2008 to $104 million since January 2009.
In total, in the past 20 months, the Civil Division, standing side-by-side with U.S. Attorneys and state Attorneys General across the country, has obtained over $6 billion in civil fraud settlements and judgments and criminal fines, penalties, restitution, and forfeitures – civil recoveries alone have topped $4.2 billion, and criminal recoveries from the Civil Division’s Office of Consumer Litigation criminal cases amounted to close to $2 billion.
Our job is not done. With the help of our law enforcement partners gathered here today, we will continue our mission to protect taxpayers and consumers against fraud, waste, and abuse.
Before I turn it over to the next speaker, I’d like to thank the dedicated attorneys in the Civil Division – both in the Fraud Section and the Office of Consumer Litigation – for their hard work on this case and their anti-fraud efforts across all sectors.
I would also like to thank United States Attorney Sally Yates of the Northern District of Georgia and her great office for their fine work on this case.
And of course, I would like to thank our partners at the FDA and Dr. Margaret Hamburg, who is with us this morning, as well as our other colleagues at the Department of Health and Human Services, including my friend and colleague, HHS Inspector General Dan Levinson, all of whom have made invaluable contributions to this effort.
Now, it’s my pleasure to introduce the U.S. Attorney for the Northern District of Georgia, Sally Yates.