The United States released data last week showing that the Department of Justice (DOJ) recovered more than $4.7 billion in 2016 from settlements and judgments in whistleblower cases involving fraud or false claims against the government. This is the third largest annual recovery in the history of the modern False Claims Act (FCA), which dates back thirty years to 1986.
As in past years, the majority of the recovery comes from the healthcare industry. Approximately $2.5 billion came from pharmaceutical companies, medical device companies, hospitals, nursing homes, laboratories and individual physicians. The actual amount recovered nationally as a result of healthcare FCA cases is even larger that the United States reported. This is because the U.S.’s figures account only for the federal recovery, but in whistleblower cases involving Medicaid, a significant portion of the recovery – often half, or more than half – goes to the state governments. The millions of dollars attributable to the states are not included in the $4.7 billion figure.
James Hoyer was proud to represent one of the relators in the largest medical laboratory case resolved this year. Millennium Health (formerly Millennium Laboratories) paid $260 million to settle a series of cases alleging that it billed the government for excessive and unnecessary urine drug and genetic testing and also that it gave free items as kickbacks to induce physicians to refer expensive and profitable lab tests to Millennium.
After healthcare, the financial industry provided the next largest source of recovery, especially in the area of housing and mortgage fraud. Whistleblower cases involving residential mortgages totaled nearly $1.7 billion alone, with Wells Fargo paying two thirds by itself.
DOJ went after several other notable areas of fraud involving federal programs and contracts, which resulted in large recoveries, including the $82.6 million from BP stemming from the April 2010 Deepwater Horizon explosion in the Gulf of Mexico and the $25.6 million from L-3 Communications Corp., for selling defective holographic weapon sites to the Department of Defense, Department of Homeland Security, and FBI.
In the for-profit college industry, James Hoyer was also proud to represent one of the relators that helped the government recover $95.5 million from the country’s second largest for-profit education company, Education Management Corp., for unlawfully recruiting students, engaging in deceptive and misleading recruiting practices, and falsely certifying compliance with certain laws.
These figures make it clear that 2016 was a great year for the many whistleblowers who worked tirelessly to help the government recover billions in taxpayer dollars.
Hopefully 2017 will be even better!