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It was a Good Year for the False Claims Act

It was a Good Year for the False Claims Act

Lebau & Neuworth attorneys frequently represent current and former employees at all levels -- from top executive to factory-floor workers -- in whistleblowing claims under the False Claims Act. We have at least two cases now under Department of Justice Review, and in 2015 we settled a client’s False Claims Act case against the former employer for nearly $15 million.

With over $4.7 billion in settlements, 2016 brought with it the third-highest annual recovery in False Claims Act history. The following are snippets from a press release from the U.S. Department of Justice. (Click here to read the release.)

The Department of Justice obtained more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2016 ending Sept. 30, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, announced today.  This is the third highest annual recovery in False Claims Act history, bringing the fiscal year average to nearly $4 billion since fiscal year 2009, and the total recovery during that period to $31.3 billion.

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Of the $4.7 billion recovered, $2.5 billion came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories, and physicians. The $2.5 billion recovered in fiscal year 2016 reflects only federal losses.  In many of these cases, the Department was instrumental in recovering additional millions of dollars for state Medicaid programs. This is the seventh-consecutive year the Department’s civil healthcare-fraud recoveries have exceeded $2 billion. 

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The next largest recoveries came from the financial industry in the wake of the housing and mortgage fraud crisis.  Settlements and judgments in cases alleging false claims in connection with federally insured residential mortgages totaled nearly $1.7 billion in fiscal year 2016 – the second highest annual recovery in this area.  

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The government also continued to pursue a variety of procurement fraud matters.  For example, L-3 Communications EOTech Inc. and its parent company, L-3 Communications Corp., paid the United States $25.6 million for defective holographic weapon sites EOTech sold to the Department of Defense, Department of Homeland Security, and FBI.  The defendants, including EOTech’s president, admitted knowing the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosing the defects to federal authorities for years.  Besides compensating the government for critical funds lost through fraud, such settlements ensure that the vital terms of contracts supporting the nation’s defense and security agencies are enforced, and deter other contractors from acting fraudulently or recklessly to increase their profits in the future. 

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Of the 4.7 billion the government recovered in fiscal year 2016, $2.9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act.  During the same period, the government paid out $519 million to the individuals who exposed fraud and false claims by filing a qui tam complaint.

Lebau & Neuworth are well-practiced in False Claims Act representation. If you need a lawyer for a potential False Claims Act case, contact us at 888-456-2529 or lebauneuworth.com/contact-us.

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