DOJ Recovers Nearly $5 Billion in False Claims in FY2012

A funny, little phrase has crept into the compliance field over the years, and the Department of Justice FY2012 report drives home the importance of knowing the phrase “qui tam.”  The DOJ recently reported that in FY2012, it reached $4.9 billion in settlements and judgments in civil cases involving fraud against the federal government, including military contracts, of which $3.3 billion were recovered in suits filed by qui tam whistleblowers.

The notion of the “qui tam” lawsuit originated in amendments made to the False Claims Act made in 1986.  The basic idea is that a person can file a lawsuit as a whistleblower, alleging false claims made by an individual or a company against the government, with the whistleblower receiving 15% – 30% of the ultimate recovery.  Leading topics of qui tam lawsuits are defense contractors and healthcare companies.

According to the DOJ, recent headliners in procurement fraud, particularly related to equipment and services for the military, were ATK Launch Systems and Maersk Line Limited.  The hit list for financial settlements in the pharmaceutical and medical device industry included GlaxoSmithKline LLC, Merck, Sharp & Dohme, and Abbott Laboratories.  Other hot areas included mortgage and housing fraud, bannered by companies Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, Ally Financial, Deutsche Bank, MortgageIT, CitiMortgage, and Flagstar Bank.