The Department of Justice last month reported its False Claims Act report for fiscal year 2022, highlighting more than $2.2 billion in settlements and judgments, and the second-highest number of settlements in history.

But even more revealing were figures that show the importance of non-intervened whistleblower cases. That is, lawsuits filed by whistleblowers under the False Claims Act that federal prosecutors declined to intervene in, leaving the whistleblowers and their attorneys, like those at Keller Grover, to bring the case to trial and hold alleged fraudsters accountable without the help of the government.

According to the DOJ report, whistleblowers filed 652 qui tam suits in fiscal year 2022 resulting in settlements and judgments exceeding $1.9 billion. In FY 2022, 76 percent of recoveries came from intervened FCA qui tam actions but only clawed back $776 million, an 18-year low and well below the average annual recovery over the past decade of $2.5 billion.

Meanwhile, non-intervened whistleblower cases recovered nearly $1.2 billion while only accounting for 24 percent of recoveries, according to the Taxpayers Against Fraud Education Fund (TAF). Keller Grover attorney Kate Scanlan is a member and chair of TAF’s Public Education Committee.  

“The modern-day success of declined qui tam actions honors the original intent behind the False Claims Act,” said Jeb White, president of Taxpayers Against Fraud. “When Congress passed the Act 160 years ago, it sought to enlist the help of the private citizenry to investigate and hold accountable those who pilfer government funds. Relators and their counsel have answered the call.”

Here are some other revelations from the annual FCA report:

Whistleblower rewards

The False Claims Act imposes triple damages and penalties on those who knowingly and falsely claim money from the federal government and whistleblowers in successful FCA cases typically receive a portion of the recovery ranging between 15% and 30%. In FY 2022, the government paid $488 million to whistleblowers.

Health care fraud

Of the more than $2.2 billion in FCA settlements and judgments, more than $1.7 billion related to the health care industry, including fraud on the Medicare and Medicaid programs for drug pricing, unlawful kickbacks, billing for medically unnecessary services or substandard care. The Justice Department also intervened in cases where organizations participating in the Medicare Advantage (or Medicare Part C) program were alleged to have knowingly submitted inaccurate information about the health status of beneficiaries to increase reimbursement.

COVID-related fraud

The DOJ resolved 35 FCA matters related to improper payments made under the Paycheck Protection Program (PPP), an $813.7 billion program that provided fully guaranteed SBA loans for eligible small businesses, individuals, and nonprofits adversely impacted by the COVID-19 pandemic. Over the last year, the department recovered over $6.8 million in cases where borrowers were alleged to improperly receive funds.

Cybersecurity

FY 2022 marked the DOJ’s first settlement under its Civil Cyber-Fraud Initiative. A medical services contractor in Cape Canaveral, Florida, paid $930,000 to resolve allegations that it falsely represented to the State Department and the Air Force that it had complied with cybersecurity contract requirements relating to the provision of medical services at State Department and Air Force facilities in Iraq and Afghanistan.

As the annual False Claims Act report shows, whistleblowers play a crucial role in exposing fraud in all layers of government programs. If you believe someone has engaged in fraud against the government, the whistleblower lawyers at Keller Grover can help you.

We provide confidential, free consultations to advise those who have observed suspected wrongdoing and can help you determine the best path forward from the very beginning, helping you minimize the impact of reporting, protect your rights and achieve the best possible outcome for your situation.