U.S. recovers $5B from businesses' false claims

WASHINGTON • The Justice Department has recovered a record $5 billion in the past year from companies that filed false claims against the government.

Acting Associate Attorney General Tony West said Tuesday that the federal False Claims Act is the most powerful tool in the government's legal arsenal for protecting the integrity of government programs, such as Medicare and defense contracting.

Fraud against the government involves a risk of harm to a wide range of Americans, including homeowners victimized by abusive foreclosure practices, children and seniors taking medication for uses that were marketed by pharmaceutical but not approved by regulators and men and women in the armed forces relying on defective products sold to the military.

It's "an epidemic that really reaches every aspect of our daily lives," said Stuart Delery, principal deputy assistant attorney general for the Justice Department's civil division.

Since the beginning of 2009, the department has recovered $13.3 billion in False Claims Act cases, the largest four-year total in the Justice Department's history. In the past year, recoveries were $4.9 billion, up by $1.7 billion from $3.2 billion the previous year — which also was a record.

In collaboration with the Department of Health and Human Services, the Justice Department recovered $3 billion in health care fraud cases under the False Claims Act in the past year. The government recovered $1.4 billion in housing and mortgage-related cases, including $900 million of a $25 billion settlement between the nation's five largest mortgage servicers and federal and state governments.

West praised private-sector whistle-blowers who come forward to report fraud by government contractors to investigators "often at great personal risk," such as retaliation from their employer or even loss of their job. Under the False Claims Act, whistleblowers can share with the government in any recovery of money based upon their disclosures. Traditionally, the Justice Department steps into about a quarter of the cases brought by whistle-blowers, who filed nearly 650 such cases in the past year. Of the $5 billion recovered, $3.3 billion stemmed from whistle-blower cases.