Obama Justice Department has joined forces with whistle blowers

Posted by Greg Gordon on December 20, 2013 


U.S. Attorney General Eric Holder, Dept. of Justice



      So-called whistle blowers who file fraud suits against big companies on behalf of federal taxpayers have often found themselves at a severe disadvantage in the past. Many of them have been left facing small armies of high-priced lawyers on their own when the Justice Department declined to exercise its option to intervene in the cases.

      But after the fourth straight year of more than $3 billion in recoveries under the False Claims Act, it's clear that the Obama administration is taking a much more aggressive approach. On Friday, Dec. 20th, the department announced that it had recovered $3.8 billion under the law during the fiscal year ending Sept. 30, 2013, of which $2.9 billion stemmed from whistle blower suits, known as quitam cases.

     Under the law, a private citizen who brings new allegations of fraud against the government can collect up to 30 percent of any court recovery.  The suit is filed under seal during a period in which the Justice Department is required to investigate whether it has merit and, if so, to intervene, a move that gives resources and heft to a plaintiff's case. But many whistle blowers have complained over the years that the department failed to fully investigate their claims.

    Since Obama took office, however, the department has recovered $17 billion, nearly half of the total since the law was amended 27 years ago to encourage whistle blowers to come forward -- legislation co-authored by Republican Sen. Charles Grassley of Iowa and then-Democratic Rep. Howard Berman of California. The fiscal 2013 figure was eclipsed only by the prior year's recovery of $5 billion. During fiscal 2013, 752 whistle blower suits were filed, 100 more than the record set the previous year, and whistle blowers collected $345 million, the department said.

   Most of the 2013 recoveries related to health care fraud, totaling $2.6 billion, reflecting the high priority the administration has placed in that area, including creation of an inter-agency task force between the Departments of Justice and Health and Human Services. Procurement fraud, primarily relating to defense contracts, accounted for another $890 million, the most ever.

   "It has been another banner year for civil fraud recoveries, but more importantly, it has been a greta year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts," said Stuart Delery, chief of the department's Civil Division.

    He noted that besides the $3.8 billion raked in via False Claims Act cases, another $443 million was recovered for state Medicaid programs.

    "The government's success in these cases is also a strong deterrent to others who would misuse public funds," Delery said. "... These recoveries would not have been possible without the contributions of ordinary men and women who made extraordinary sacrifices to expose fraud and corruption in the government programs."







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