WASHINGTON — The Justice Department announced this week that another $1.3 billion has been recovered for the U.S. Treasury thanks to whistleblower legislation sponsored in 1986 by Sen. Chuck Grassley. The total amount recovered through these provisions is now $18 billion.
The amendments Grassley championed 20 years ago along with Rep. Howard Berman of California strengthened the Civil War-era False Claims Act which was originally signed into law by President Abraham Lincoln. The Grassley-Berman “qui tam” amendments empowered whistleblowers to file suit on behalf of the United States against those who fraudulently claim federal funds, including Medicare, Medicaid, contract payments, disaster assistance and other benefits, subsidies, grants and loans.
Grassley said that amendments to the False Claims Act have empowered whistleblowers to help fight fraud against the government. Fraudulent claims by defense contractors during the 1980s prompted the initiative. Today the “qui tam” amendments also recoup billions that would otherwise be lost to health care fraud.
The Justice Department said today that during the last year, the federal Treasury reclaimed $3.1 billion in settlements and judgments overall under the False Claims Act. Of that $3.1 billion, $1.3 billion was associated with lawsuits initiated by whistleblowers.
“President Abraham Lincoln signed the original False Claims Act into law in 1863 to keep profiteers from bilking the Union Army,” Grassley said. “Today, individual citizens are making the same kind of important difference in exposing fraud by those who do business with the government. This law is one of the most powerful tools we have in rooting out waste, fraud and abuse in the federal government. As these recoveries show, the False Claims Act has worked in the past, it works in the present, and will continue to protect taxpayer dollars long into the future.”
Grassley recently authored a provision that created an incentive for states to encourage whistleblowers to help recover tax dollars that would otherwise be lost to fraud based on the tremendous success of the federal law. The provision was included in the Deficit Reduction Act of 2005 which was signed into law in January 2006.
Here is a copy of the press release from the Justice Department.
FOR IMMEDIATE RELEASE
CIV
TUESDAY, NOVEMBER 21, 2006
(202) 514-2007
WWW.USDOJ.GOV TDD (202) 514-1888
JUSTICE DEPARTMENT RECOVERS RECORD $3.1 BILLION
IN FRAUD AND FALSE CLAIMS IN FISCAL YEAR 2006
Largest Amount Ever Recovered in a Single Year
WASHINGTON - The United States in the fiscal year ending
September 30, 2006 recovered a record amount of more than $3.1 billion
in settlements and judgments in cases involving allegations of fraud
against the government, the Justice Department announced today.
Previously, the Department's largest recoveries totaled $2.2 billion for FY 2003. The largest of the FY 2006 settlements against two industry giants - Tenet Healthcare Corporation and The Boeing Company - comprised nearly half the total.
"These record recoveries send a clear message that the Justice
Department will not tolerate fraud against the government," said
Attorney General Alberto Gonzales. "Since 1986, the Justice Department
has recovered $18 billion from those who commit fraud. These funds are
then restored to their intended public purposes and save taxpayers'
money."
"By any measure, it was a remarkable year," said Peter D.
Keisler, Assistant Attorney General of the Department's Civil Division.
"Recoveries in health care fraud climbed more than a billion dollars
over last year, and recoveries outside the health care arena-which
accounted for 28 percent of the total-increased by half a billion.
Obviously, the system is working."
Assistant Attorney General Keisler also paid tribute to Senator
Charles Grassley of Iowa and Representative Howard L. Berman of
California who sponsored the 1986 amendments to the False Claims Act,
the government's primary weapon to fight fraud against the government.
Government-initiated claims accounted for $1.8 billion of the
total $3.1 billion, while suits brought by whistle blowers under the
False Claims Act's qui tam provisions accounted for the remaining $1.3
billion. The qui tam provisions authorize individuals to file suit on
behalf of the United States against those who have falsely or
fraudulently claimed federal funds. Such cases run the gamut of
federally funded programs from Medicare and Medicaid to defense
contracts, disaster assistance and agricultural subsidies.
Individuals who knowingly submit false claims for federal funds
are liable for three times the government's loss plus a civil penalty of $5,500 to $11,000 for each false claim. If the United States intervenes in a qui tam action, the person who filed the suit may receive from 15 up to 25 percent of the government's recovery. In FY 2006, whistleblowers were awarded $190 million. (This figure does not reflect whistleblower shares for FY 2006 settlements that were or will be determined after Sept. 30, 2006.)
By industry, 72 percent of the recoveries were in health care,
20 percent in defense, and 8 percent other. Health care fraud accounted for $2.2 billion in settlements and judgments, including a $920 million settlement with Tenet Healthcare Corporation, the nation's second largest hospital chain. Although Medicare and Medicaid, both
administered by the Department of Health and Human Services, bear the
brunt of health care fraud, other programs that are affected include the Federal Employees Health Benefits Program run by the Office of Personnel Management, the TRICARE military health insurance program run by the Department of Defense, and health care programs run by the Department of Veterans Affairs, the Department of Labor and the Railroad Retirement Board.
Defense procurement fraud accounted for $609 million in
settlement and judgment awards, including a $565 million settlement with The Boeing Company, the nation's second largest defense contractor.
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