To receive record payouts this year for contractor-fraud lawsuits. The federal government is on track to receive record payouts this year for contractor-fraud lawsuits, thanks to 753 whistleblowers who came forward to report fraud and mismanagement.
Patrick Burns, co-director of the nonprofit organization Taxpayers Against Fraud Education Fund, said 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 its alleged off-label use of Risperdal and other drugs.
The government increased payouts to whistleblowers in an effort to fight fraud.
In 1987, the year the government increased payouts to whistleblowers in an effort to fight fraud, it collected $86 million. 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 that year. According to Businessweek, health care fraud makes up the bulk of DOJ’s cases and, on average, whistleblowers receive 16 percent of the settlement amount. The government has collected $39 billion since 1987, not including criminal fines, which raise the total to about $55 billion. Whistleblowers have earned $4.3 billion, with $388 million paid in 2013.
But whistleblowers risk losing their jobs or suffering other retaliation for coming forward, and not all cases go forward. In about three quarters of qui tam cases, the Justice Department does not join in, and very few law firms pursue such cases on their own, according to Businessweek. Even in the successful suits – about 150 a year – the payout to the whistleblower is rarely large enough to be “life changing,” according to a Washington attorney who has represented whistleblowers. Earlier this year, an Alabama nurse was paid $15 million for reporting allegedly fraudulent Medicare billing, but many whistleblowers instead find themselves blacklisted in their professions, despite federal protections. Many end up taking unskilled jobs. The federal Office of Special Council is examining 37 claims of retaliation against Veterans Affairs employees, including doctors, nurses, and administrators, who have spoken out in the current health care scandal.