Whistleblowers played a key role in protecting the U.S. government from fraud in fiscal 2018.

Settlements and judgments from False Claims Act actions, which are civil cases involving fraud and false claims against the government, returned $2.88 billion to government coffers. The bulk of that ($2.1 billion) came from whistleblower — or qui tam — actions, according to the Justice Department. The federal government’s fiscal year ended in September.

During the Civil War, this type of fraud meant selling the U.S. government lame horses or sawdust instead of gunpowder. Today, it may involve fraudulent schemes involving federal healthcare programs, sidestepping public health safeguards, or overcharging or selling faulty equipment to the military or law enforcement agencies. Keller Grover has long worked with the courageous people who see this type of fraud and want to do something about it.

Congress contemplated the government relying heavily on whistleblowers to help protect the government from fraud; as an incentive, whistleblowers can receive as much as 30 percent of amounts the government recovers. The unique public partnership has proven to be invaluable.  “Whistleblowers have played a vital role in unmasking fraudulent schemes that might otherwise evade detection,” Assistant Attorney General Jody Hunt said in a written statement. “The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes.”

In terms of numbers, whistleblowers filed 645 qui tam suits in fiscal 2018, continuing a long trend of whistleblower actions outpacing other FCA actions (122 in fiscal 2018). Whistleblowers received more than $301.73 million during fiscal 2018 for their vital role in the government’s recoveries..

Last year wasn’t even a record setter. Whistleblower activity and recoveries resulted in higher figures during the previous couple of fiscal years:

• In 2017, whistleblowers filed 680 actions, with settlements and judgments yielding $3.18 billion.
• In 2016, whistleblowers filed 707 actions, with settlements and judgments yielding $3.03 billion.

Last year, the heavily regulated health care and defense sectors brought the largest recoveries, though actions can cover a broad range of sectors. Settlements ran the gamut of fraudulent schemes from allegations of repackaging drugs to inflated drug prices, or health care providers getting involved in kickbacks.

Looking to 2019, whistleblower activity is likely to continue to yield significant results. Health care fraud and procurement fraud matters probably will still account for much of the activity.

Looking farther out, there has been concern about Attorney General nominee William Barr’s comments that the provision of the False Claims Act that allow whistleblowers to bring these cases in the name of the government is unconstitutional. However, Barr has already walked back some of those comments during his Senate confirmation hearings.

It would be difficult for the U.S. government to do without the help of whistleblowers, as the statistics bear out. Federal markets regulators also have been relying on whistleblowers recently, initiating enforcement actions that were only made possible with the unique inside information provided by whistleblowers giving tips to the government.

We are here to help those who want to report wrongdoing. If you want advice about how to handle suspected fraud, contact Keller Grover for a free consultation. We can help you understand your options, applicable protections and steps you should take. In more than 25 years litigating fraud and employment cases, Keller Grover has recovered billions for its clients.