In fiscal year 2012, federal and state False Claims Act cases returned over $9 billion back to the government. This sum consists of criminal fines as well as several large state False Claims Act settlements, including over $300 million recovered by the State of California in a single Medicaid HMO case.
Notes Kristin Amerling, President of Taxpayers Against Fraud: “The False Claims Act is working exactly as it should, forging a public-private partnership that incentivizes integrity and discourages wrongdoing, even as it works to keep government and law enforcement more efficient.”
FY 2012 saw increased recoveries under state False Claims Act laws patterned after the federal statute, as well as increased criminal fines associated with larger federal False Claims Act cases.
“While health care fraud still represents the bulk of False Claims Act recoveries at both the state and federal level,” said Amerling, “we are starting to see new areas of inquiry open up, especially in the banking, mortgage, and pension arenas, where state action may bring real dividends.”
The largest recovery in FY 2012 came from the company with the largest False Claims Act settlement in FY 2011, GlaxoSmithKline. FY 2012 also saw a major award paid under the IRS whistleblower program and the first case settled under the SEC whistleblower program. Both programs are modeled on the federal False Claims Act.
“At a time when federal and state governments are facing fiscal challenges, whistleblower programs offer the American people a win-win: billions of dollars recovered, and future frauds deterred.”
Just one week into the new fiscal year, it is too early to predict 2013 False Claims Act recoveries, but $3.5 billion in already-reported False Claims Act settlements lie just ahead.
A chart of top 30 FCA recoveries in FY 2012 follows. Of these 30 recoveries, 28 are whistleblower-initiated.
Top 30 False Claims Act Settlements of FY 2012
Company |
Total Settlement |
Claim and Additional Notes |
Case Initiated By |
|
GlaxoSmithKline |
$3,000,000,000 |
Illegal marketing of nine different prescription drugs, including Wellbutrin, Paxil, Avandia, Advair, Zofran, Imitrex, Lamictal, Lotronex, Floven, and Valtrex. Settlement includes $2 billion civil, and $1 billion criminal. |
Whistleblowers |
|
Abbott Laboratories |
$ 1,500,000,000 |
Off-label marketing of Depakote. Settlement includes $800 million civil, and $700 million criminal. |
Whistleblowers |
|
Bank of America |
$1,000,000,000 |
Mortgage and bank fraud. |
Whistleblowers and Federal Government |
|
Merck |
$950,000,000 |
Illegal marketing of Vioxx. Settlement includes $628.4 million civil, and $321.6 million criminal. |
Whistleblowers |
|
Senior Care Action Network |
$323,670,000 |
California Medicaid fraud case. HMO cost reporting fraud. |
Whistleblowers |
|
Actavis |
$202,600,000 |
National settlement after trial loss by company in a Texas state FCA case dealing with Average Wholesale Price (AWP). |
Whistleblowers |
|
Deutsche Bank |
$202,300,000 |
False certification for HUD/FHA loans. |
Federal Government |
|
Oracle |
$199,500,000 |
Failure to provide discount pricing as required. |
Whistleblowers |
|
McKesson |
$190,000,000 |
Inflating prescription drug price information. This is the federal part of the McKesson case detailed below. |
Whistleblowers |
|
Citigroup |
$158,000,000 |
FHA home loan approval fraud. |
Whistleblower |
|
Johnson& Johnson |
$158,000,000 |
Off-label marketing of Risperdal. Texas case, settled in the middle of a trial. |
Whistleblower |
|
McKesson |
$ 151,000,000 |
Inflating inflated prescription drug price information. This is a 29-state settlement that is part of the McKesson case noted above. |
Whistleblowers |
|
Sandoz |
$150,000,000 |
AWP case never joined by DOJ. Most of the settlement money went to CA and FL. |
Whistleblowers |
|
WellCare Health Plans |
$137,500,000 |
Price-gouging, knowingly retaining Medicare and Medicaid overpayments, cherry-picking. |
Whistleblowers |
|
Bank of America, JPMorgan, Wells Fargo, and Citigroup |
$95,000,000 |
Mortgage and bank fraud. |
Whistleblowers |
|
Bank of America |
$75,000,000 |
Mortgage and bank fraud. |
Whistleblowers |
|
New York City and State |
$70,000,000 |
Home healthcare upcoding. |
Whistleblowers |
|
LHC Groups |
$65,000,000 |
Home healthcare provider billing fraud. |
Whistleblowers
|
|
Mylan |
$57,000,000 |
California False Claims Act case dealing with AWP. |
Whistleblowers |
|
DaVita |
$55,000,000 |
Texas settlement dealing with Epogen over-fill kickback. |
Whistleblowers |
|
Harbert Corporation |
$47,000,000 |
Settlement of price-gouging in 1990s-era USAID construction contract. |
Whistleblowers |
|
JPMorgan Chase |
$45,000,000 |
Mortgage and bank fraud. |
Whistleblowers |
|
Orthofix International |
$43,000,000 |
Illegal marketing of a bone growth stimulation device and illegal kickbacks. |
Whistleblowers |
|
MetLife |
$40,000,000 |
Unclaimed benefit / escheatment in MN insurance case. |
Whistleblowers |
|
ATK Launch Systems |
$37,000,000 |
Dangerous and defective illumination flares sold to the Army and the Air Force. |
Whistleblowers |
|
Blackstone Medical |
$32,000,000 |
Illegal marketing of a bone growth stimulation device and illegal kickbacks. |
Whistleblowers |
|
Maersk Line |
$31,900,000 |
Submitting inflated cargo invoices for goods shipped to U.S. troops in Afghanistan and Iraq. |
Whistleblowers |
|
GE Healthcare |
$30,000,000 |
Diluting cardiac diagnostic drug. |
Whistleblowers |
|
Odyssey Healthcare |
$25,000,000 |
Billing for hospice care not legally covered by Medicare. |
Whistleblowers |
|
Merck |
$24,000,000 |
Price-gouging on Medicaid drugs to Massachusetts. |
State Government |
|
Medtronic |
$23,500,00 |
Cardiac defibrillator and pacemaker fraud. |
Whistleblowers |
|
TOTAL |
$9,094,474,000 |
|
|
Note: Approximately 100 other False Claims Acts, totaling approximately $150 million, were settled in FY 2012.