With a record 753 whistleblowers coming forward to file contractor-fraud cases in 2013, the federal government could be in line to receive record payouts.
Patrick Burns, co-director of the nonprofit organization Taxpayers Against Fraud Education Fund, estimates that the Department of Justice should collect more than $5 billion under the federal False Claims Act by the close of fiscal year 2014, Bloomberg Businessweek reports. This includes $2.2 billion paid by Johnson & Johnson for alleged off-label use of Risperdal and other drugs.
In 1987, when the government increased payouts to whistleblowers in an effort to fight fraud, it collected $86 million. That year, thirty citizens filed cases under qui tam, a provision that allows an individual with knowledge of fraud or wrongdoing to sue on behalf of the government and share in any settlement. In 2013, a record 753 whistleblowers sued, accounting for 89 percent of DOJ fraud cases filed. Health-care fraud makes up the bulk of DOJ’s cases. Whistleblowers, on average, receive 16 percent of the settlement amount, Businessweek reports. The government has collected $39 billion since 1987, not including criminal fines, which raise the total to about $55 billion, and whistleblowers have earned $4.3 billion, with $388 million paid in 2013.
But whistleblowers face risks in coming forward. Many lose their jobs or suffer retaliation like demotion or reassignment. And their cases are not always pursued. In about three quarters of qui tam cases, the Justice Department does not join in, and very few law firms pursue such cases without DOJ backing, Businessweek writes. Even in the 150 or so successful suits each year, the whistleblower’s payment is rarely large enough to be “life changing,” said a Washington attorney who has represented whistleblowers. Earlier this year, an Alabama nurse received $15 million for reporting alleged fraud in Medicare billing. But despite federal protections, whistleblowers can end up blacklisted in their professions, unable to find work other than unskilled jobs. The federal Office of Special Council is examining claims of retaliation against 37 Veterans Affairs employees across the country who have spoken out in the current crisis over veterans’ health care.
