Civil Division Pulls in Record $5B in False Claims Act Recoveries in FY12
By Elizabeth Murphy | December 4, 2012 2:05 pm

The Justice Department secured nearly $5 billion in recoveries under the False Claims Act — the government’s main tool against fraud — for fiscal year 2012, department leadership announced today.

The department’s Civil Division, along with 94 U.S. Attorney’s offices, recovered $4.959 billion this fiscal year, a $1.7 billion increase from last year’s number. It marks a record four-year period, officials announced, with recoveries totaling $13.3 billion in False Claims Act cases since January 2009.

“This was a banner year for False Claims Act recoveries,” Stuart Delery, the Principal Deputy Assistant Attorney General for the Civil Division, said at a briefing today with reporters. “By focusing on rooting out fraud like never before, this administration has achieved record returns.”

Delery, along with Tony West, Acting Associate Attorney General, noted the department’s focus this year on financial fraud cases, on top of the other major types of frauds, including in the health care industry.

“We’ve seen a shift in the last couple of years not only in how we approach the investigation and development of financial fraud cases,” West said, “but also to try to look across the government and coordinate and collaborate and synergize resources in a new way — perhaps more effective than in the past.”

Tony West (Andrew Ramonas/Main Justice)

The largest-ever recovery came this year in the financial fraud arena, with five of the nation’s largest banks settling with the government for $25 billion over abusive mortgage practices. About $911 million of the $25 billion total was allocated to the False Claims Act.

West noted, however, that the department isn’t striving purely for big numbers.

“We don’t do the work in order to make records,” West said. “We do the work because it is the work that needs to be done to aggressively root out fraud.”

Delery, too, said the department’s focus on financial fraud isn’t distracting investigators from others types of crimes under the False Claims Act.

“By focusing attention on financial fraud we are not taking our eye off continuing issues in the health care area,” he said. “We are trying to add to the enforcement priorities and not to subtract.”

The second largest recovery ever came out of the health care industry this year, with pharmaceutical giant GlaxoSmithKline LLC paying $3 billion to resolve allegations it illegally marketed drugs and withheld safety data from U.S. regulators. That case originated from a whistleblower, which also saw record numbers this year, West said.

A record-setting $3.3 billion was recovered from these whistleblower, or qui tam, cases, with nearly 650 actions filed.

“Fraud against the government is not just a problem that affects us as taxpayers,” Delery said. “It is a problem that affects us as parents and patients. It puts service members and law enforcement officers at risk. It is an epidemic that plagues every aspect of our daily lives.”

Sen. Charles Grassley (R-Iowa) lauded the power of the False Claims Act in a statement today.

“The federal False Claims Act is an unsung hero in the fight to root out fraud against the federal treasury.  It’s proven to be the most powerful tool in recovering taxpayer dollars.  The law has recouped tens of billions of taxpayers’ dollars that would otherwise have been lost, and it’s deterred even more,” Grassley said, adding that whistleblowers are “key to the recoveries.”

UPDATED 4:30 p.m.: This story was updated to include comment from Sen. Charles Grassley (R-Iowa).

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