Justice Dept. recovers record $5 billion under False Claims Act

Jon Elswick/AP - The headquarters of the Department of Justice building in Washington, D.C.

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The Justice Department’s civil division recovered a record $5 billion in the past fiscal year from companies that defrauded taxpayers, with much of the abuse occurring in the health-care and mortgage industries.

The department pursued settlements and judgments under the False Claims Act, which Acting Associate Attorney General Tony West described Tuesday as “quite simply, the most powerful tool we have to deter and redress fraud.”

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“Vigorous enforcement of the act allows us to protect not only taxpayer dollars but also the integrity of important government programs on which so many Americans rely,” West said.

The amount of money recovered in 2012 is up from $3.2 billion last year, and two-thirds of it was secured through the act’s whistleblower provisions.

“Many of these cases would not be possible without the whistleblowers . . . who have come forward to report fraud, often at great personal risk,” said Stuart Delery, the principal deputy assistant attorney general for the civil division.

Among the major settlements was a payment of $1.5 billion by the pharmaceutical giant GlaxoSmithKline to resolve allegations that it promoted drugs for uses not approved by the Food and Drug Administration and paid kickbacks to physicians to prescribe the drugs, department officials said. The settlement, the largest health-care fraud case pursued by the department, also included nearly another $1.5 billion in criminal and Medicaid recoveries.

A $25 billion settlement with the country’s five largest mortgage lenders included $900 million under the False Claims Act. Delery said the department continued to pursue investigations in the mortgage industry.

 
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