Welcome to today's program on Qui Tam litigation.
As you will hear, this civil procedure has existed since the early common law to prosecute and collect sums owed the sovereign. In simple terms, the law has long recognized the need for private actions and private enforcement to supplement the work of authorized sovereign law enforcement officials.
In more contemporary times, Qui Tam litigation has expanded since the enactment of the new Federal False Claims Act in 1986 and more recently with the Recovery Act in 2009.
It is central to the mission of the Department of Justice to pursue and seek redress from those who defraud the government. Since 1986, nearly $30 billion has been recovered under the False Claims Act.
This Administration has made the pursuit of those who steal from the taxpayer a top priority. Since the beginning of the Obama Administration, the Department of Justice, led by Attorney General Eric Holder, has achieved the largest two- year recovery of taxpayer dollars in the history of the Nation.
Let me share with you several data points:
- in Fiscal Year 2010, the United States Attorney's Offices nationwide recovered $6.7 billion in Affirmative Civil Enforcement, financial litigation, and civil and criminal penalties.
- of that total, $3 billion was recovered through Affirmative Civil Enforcement.
- of that $3 billion, $2.5 billion (83% percent) came directly from health care fraud recoveries.
- In FY 2010, Qui Tam relators received $385 million in fees.
Since January 2009, the Justice Department commenced more health care fraud investigations; secured more and larger fines and judgments; and recovered more taxpayer dollars lost to health care fraud than in any other two-year period.
In May 2009, Attorney General Eric Holder and the Secretary of the Department of Health and Human Services announced the creation of a new interagency task force, the Health Care Fraud Prevention and Enforcement Action Team or "HEAT" to increase and optimize criminal and civil enforcement of health care fraud.
So, you can see the Administration in Washington, DC has made this a priority, and they have delivered.
This commitment is reflected in our work here in the Western District of Pennsylvania.
If you reduce our Office's reorganization and priority reallocation announcement in October 2010 to its bare essence, there are three major new substantive initiatives:
1) National Security;
2) Civil Rights; and
3) Affirmative Civil Enforcement.
In selecting Mike Comber to head the Civil Division of the United States Attorney's Office, I wanted to leverage his broad experience as an Assistant United States Attorney, and as a private practitioner, his superb cyber skills and his great intelligence, energy and judgment. I have charged Mike with ensuring that our work here reflect the commitment of our national priority to pursue government fraud and abuse. That directive specifically requires a more vigorous Affirmative Civil Enforcement effort including a reinvigorated Qui Tam program.
We have begun with an assessment of our past performance on ACE. Let me share that with you.
In the past, our Office dedicated only one AUSA to ACE, but his time was split between ACE and other matters.
In addition, several years ago the Department of Health and Human Services removed its Office of Inspector General from this District and we are serviced remotely from Philadelphia. This has effectively dried up health care fraud litigation in our District.
Our review disclosed approximately less than 100 Qui Tam matters referred to our office over the last ten years. We had not intervened on the merits in any and many requests were still pending and others were unsealed without an intervention decision.
Our total ACE recoveries in the District in the Fiscal Year closing immediately prior to my arrival were $5.5 million. This compares to $25 million in the Middle District of Pennsylvania and $420 million in the Eastern District of Pennsylvania. The numbers tell the story and the undeniable fact is that ACE was not a priority in former times.
That has changed. ACE is a priority here now. This performance will improve.
Our plan is as follows:
1) In November, we announced that our first priority hire would be the hiring of an ACE coordinator. While this position was advertised, the Department announced a hiring freeze. Nonetheless, we will fill the position as soon as the freeze is lifted.
2) We are devising strategies to substitute our own investigative program to account for the lack of proximate HHS resources to do investigations and develop cases.
3) We have re-allocated resources and now have four AUSAs devoting time to ACE and three AUSAs plugged into health care fraud.
4) We are emphasizing health care fraud but also expanding ACE to include civil rights, housing, transportation, education and other areas of fraud and abuse.
5) We are reviewing all allocations of Recovery Act funds and seeking to find and pursue fraud aggressively.
6) We have refined our investigative review process to shorten seal periods. This is more efficient and fair to relators and defendants.
And, of course, through outreach programs including programs like this one, we are alerting stakeholders that we are changing course and inviting private assistance through Qui Tam litigation.
The positive results have been immediate - this year already, we have intervened in one matter and obtained the Department's approval to intervene in a second matter, and several others under review will be acted upon in the very near future. We are also cleaning up a huge backlog of unaddressed and old matters to make room for new cases which will come.
While we are approaching this effort aggressively, we are most mindful of a need to be balanced. We recognize that not all relators and whistle blowers have pure motives; and not all allegations are well-founded. We need both good relators counsel and good defense counsel in this effort to wage the battle for justice for our citizens.
Our goal is to have an active, effective and balanced ACE effort making full use of our relator partners and to intervene when we see that our direct participation in the litigation is justified and warranted.
I want to close with an observation. For whatever reason, government fraud and abuse is ubiquitous. Benjamin Franklin observed many years ago "there is no kind of dishonesty into which good people more easily and frequently fall than that of defrauding the government." Since Franklin's time, the problem has worsened. We aim to do our part; to carry our load; and to follow the leadership of the Attorney General to meet today's challenge. But, we need your help - our fellow citizens need your help. The effort to reduce government fraud and abuse can be led by us but the problem is so large we need whistle blowers, relators, and committed lawyers on both sides to wage war and bring justice to those who steal from the government.
My thanks to the organizers of this important conference and I offer special thanks to Judge Fischer, Harry Litman, Tina Miller, Tom Farrell, Marc Raspanti and especially Mike Comber who is tireless and indefatigable in his good work.
We look forward to working with you, and I hope you have a good session today.