False Claims Act Update & Alert


Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG          
October 25, 2010


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Contact: Patrick Burn
Phone: 202-296-4826 x 24
Email: PBurns@taf.org




Over $3 Billion in Fraud Recoveries Under the False Claims Act in FY 2010

Anti-Fraud Law Is Effective and Efficient

Taxpayers Against Fraud calculates the U.S. Department of Justice recovered over $3.1 billion of America's stolen money in Fiscal Year 2010 thanks to whistleblowers and the federal False Claims Act. 

More than 80 percent of all successful False Claims Act recoveries are brought to the government by whistleblowers and their lawyers, making the law the most important tool the U.S. Government has in the war against fraud.

The False Claims Act provides for triple damages plus statutory fines of up to $11,000 per false claim.

Whistleblowers that bring evidence of fraud to the U.S. Government are  eligible for awards of 15 to 30 percent of the total amount recovered under the Act.

  • 80 percent health:
    Approximately 80 percent of all fraud recoveries under the False Claims Act occur in health care, but significant amounts of fraud are also found in defense, education, transportation, and the oil and gas industries.
  • $15 back for ever $1 invested:
    Taxpayers Against Fraud
    calculates that the False Claims Act is returning more than $15 back to the American people for every dollar invested in health care investigations and prosecutions.
  • 28 State False Claims Acts:
    In recent years, significant Medicaid recoveries have returned hundreds of millions of stolen dollars back to the states.  In order to increase the amount of money coming back to them, and to initiate their own recoveries, 28 states and the District of Columbia have now passed their own versions of the federal False Claims Act.
  • Congress created IRS and SEC whistleblower offices:
    Along with state False Claims Acts, the success of the federal False Claims Act has also spurred the creation of an IRS Whistleblower Office focused on large tax frauds (over $2 million per recovery) and an SEC Whistleblower Office designed to end market manipulations and massive stock swindles.
  • About the Top Ten Cases:
    4 All of the top ten federal False Claims Act settlements in FY 2010 involved health care, with eight involving fraud committed by pharmaceutical companies.
    4 Of 145 False Claims Act cases settled or resolved in FY 2010, the top 10 cases accounted for $2.7 billion of the more than $3.16 billion recovered.

Major False Claims Act Cases
Resolved in Fiscal Year 2010






$600 million

$225 million to resolve civil allegations and a $375 million criminal fine.)


Off-label marketing practices involving Botox


$520 million


Illegally marketed the anti-psychotic drug Seroquel

Novartis Pharmaceuticals

$422.5 million

$237.5 million to resolve civil allegations and a $185 million criminal fine)


Unapproved promotion of Trileptal

Forest Laboratories

$313 million

($149 million to resolve civil claims, a $150 million criminal penalty, and $14 million in forfeiture). 


Marketed  Levothroid without FDA approval and unlawfully promoted Celexa and Lexapro for pediatric use

Elan Corporation

$203.5 million


Improperly sold and marketed Zonegran

Teva Pharmaceuticals

$169 million


Inflated prices reported to  Medicaid

WellCare Health Plans

$137.5 million


Defrauded Medicare and Medicaid programs in several states

Mylan, AstraZeneca, and Ortho-McNeil 

$124 million


Companies improperly classified certain drugs to evade rebate obligations

Omnicare and  IVAX Pharmaceuticals

$112 million


Omnicare engaged in kickback schemes with several parties, including IVAX

Health Alliance of Greater Cincinnati and Christ Hospital

$108 million


Kickbacks to doctors in exchange for referring cardiac patients hospital