False Claims Act Reaps Nearly $5 Billion for DOJ in 2012

“While everyone appears to be spending time on FCPA enforcement and compliance, companies need to spend more time in protecting themselves from the False Claim Act.” (Michael Volkov)

The Department of Justice just announced that it recovered a record $4.9 billion from False Claims Act judgments and settlements in the 2012 fiscal year, and the trend is expected to continue.

From lawyers and law firms on JD Supra, three takeaways for businesses of all shapes and sizes:

1. Most cases originate with whistleblowers:

“The majority of False Claims Act cases are filed by whistleblowers under the Act’s provisions allowing private citizens to file false claims actions on the government’s behalf. The Act provides incentives for whistleblowers to bring false claims actions by granting the whistleblower thirty percent of the recovery if the government prevails. This past fiscal year, an unprecedented 647 whistleblower suits were filed, and the government recovered $3.3 billion from those actions.” (Warner Norcross & Judd)

2. Cleaning your house now might be the best way to lower risk:

“Whistleblowers continue to be active in bringing allegations of FCA violations to the Department of Justice and other agencies, and the federal government can be expected, in turn, to continue to heavily rely on their reports with ever-increasing success. This, of course, requires employers to broadly step-up their compliance programs.” (Proskauer)

3. The spotlight is on healthcare, mortgage fraud, and government contracts:

“We will see increasing efforts in FY 2013 in health care as greater attention is focused on those costs through the ‘fiscal cliff’ negotiations, mortgage fraud as the Consumer Financial Protection Bureau gets its feet under it, and government contracts, particularly as the contract apparatus in Afghanistan shifts from ‘getting it done’ to ‘getting it done absolutely right.’” (Venable)

The updates:

Related reading:

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