TOP FALSE CLAIMS ACT CASES
BY CIVIL AWARD AMOUNT
The False Claims Act: Its Record Decades of Success
Since the 1986 amendments, false claims actions have recovered over $56 billion dollars of taxpayer money. By exposing and penalizing industry-wide fraud schemes, incentivized integrity whistleblower programs have recovered billions that otherwise would have been lost to fraud. Last year alone, qui tam relators filed more than 700 new FCA cases, and DOJ reported recoveries of more than $3.7 billion, making 2017 the eighth consecutive year in which the federal government has recovered more than $3 billion in False Claims Act cases.
The federal and state governments often discover fraud not because of agency oversight or a government audit, but through the efforts of a private whistleblower using the False Claims Act. Over 80 percent of the cases brought under the federal False Claims Act are initiated by whistleblowers, and an even larger percentage of the funds recovered can be ascribed to whistleblower actions. The data highlighted on this page features the largest False Claims Act cases by civil award amount to date.
Understanding the Data:
Cases in the table above with an asterisk (*) are cases in which criminal penalties were also assessed.
Cases in the table above with a diamond ( ♦ ) are state cases.
Below, in alphabetical order, is more background on some of these cases:
Agility Public Warehousing Co
Abbott Laboratories paid over $1.5 billion to settle civil and criminal charges in part brought by four False Claims Act qui tam cases alleging the company promoted the off-label use of Depakote, an anti-seizure drug. The settlement, includes a $700 million criminal fine and an $800 million civil settlement (covered under the False Claims Act cases) with the federal government ($560,851,357) and the states ($239,148,643) that chose to participate.Agility Warehousing agrees to pay $95 million to resolve civil fraud claims, to forgo administrative claims against the United States seeking $249 million in additional payments under its military food contracts, and to plead guilty to a criminal misdemeanor offense for theft of government funds arising from allegations that Agility overcharged the United States when performing contracts with the Department of Defense (DOD) to supply food for U.S. troops from 2003 through 2010.
Allied Home Mortgage Capital Corporation
Allied Home Mortgage agrees to pay for over a decade of fraudulent misconduct while participating in the Federal Housing Administration mortgage insurance program. In November 2016, after a five-week trial in Houston, Texas, a unanimous jury found that Allied and the CEO, Hodge violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and caused over $92 million in damages to the United States. The judgment, ordered by the district court on September 14, 2017, trebles the jury’s $92 million FCA verdict and imposes additional statutory penalties under the FCA and FIRREA as determined by the Court in light of Allied and Hodge’s misconduct.
Bank of America
Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch will pay $16.65 billion– the largest civil settlement with a single entity in American history — to resolve federal and state claims. The settlement relates to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The investigation into these practices were in part brought by three private whistleblower lawsuits filed under seal pursuant to the False Claims Act. As part of the settlement, Bank of America and Countrywide have agreed to pay $1 billion to resolve their liability under the False Claims Act.
Bechtel National Inc.
Bechtel National agrees to pay $125 million to resolve allegations under the False Claims Act that they made false statements and claims to the Department of Energy by charging DOE for deficient nuclear quality materials, services, and testing that was provided at the Waste Treatment Plant at DOE’s Hanford Site near Richland, Washington. The settlement also resolves allegations that Bechtel National Inc. and Bechtel Corp. improperly used federal contract funds to pay for a comprehensive, multi-year lobbying campaign of Congress and other federal officials for continued funding at the WTP.
Deepwater Horizon reaches a historical settlement that resolves the U.S. government’s civil penalty claims under the Clean Water Act, the governments’ claims for natural resources damage claims under the Oil Pollution Act, and also implements a related settlement of economic damage claims of the Gulf States and local governments. Taken together this resolution of civil claims is worth more than $20 billion and is the largest settlement with a single entity in the history of federal law enforcement.*the $82.6 million reflects the amount paid to the US government for violations of the FCA; however, this amount has potential to grow as they proceed with the settlement
eClinical works agrees to pay $155 million to resolve a False Claims Act lawsuit alleging that ECW misrepresented the capabilities of its software. The settlement also resolves allegations that ECW paid kickbacks to certain customers in exchange for promoting its product.
GlaxoSmithKline plead guilty to several criminal misdemeanor charges and paid $3 billion ($2 billion civil, $1 billion criminal) to settle a series of False Claims Act cases brought to the U.S. Government by whistleblowers. GSK was charged with illegally promoting nine different prescription drugs, including the antidepressants Wellbutrin and Paxil, the diabetes medication Avandia, the pulmonary drug Advair, and the anti-nausea medication Zofran, as well as five other drugs: Imitrex, Lamictal, Lotronex, Floven, and Valtrex. GSK was charged with pervasive illegal conduct that continued for more than a decade, including paying kickbacks, doctoring and fabricating scientific research and articles, bribing doctors with vacations to Hawaii and Puerto Rico, and creating marketing kits packed with unsubstantiated claims.
In December 2000, The Healthcare Company (HCA) pled guilty to criminal conduct and agreed to pay more than $840 million in criminal fines, civil penalties and damages for unlawful billing practices. $731,400,000 was recovered under the False Claims Act. The settlement resolved allegations that the company knowingly ordered lab tests that were not medically necessary, “upcoding” medical problems in order to get higher reimbursements, billing the government for advertising under the guise of “community education,” and billing the government for non-reimbursable costs incurred in the purchase of home health agencies. The following settlement resolves HCA’s civil liability for false claims including cost report fraud and the payment of kickbacks to physicians. In a separate administrative settlement with the Centers for Medicare & Medicaid Services (CMS), HCA agreed to pay an additional $250 million to resolve overpayment claims arising from its cost reporting practices. Combined with the December 2000 settlement, the government has recovered $1.7 billion from HCA, by far the largest recovery ever reached by the government in a health care fraud investigation.
JP Morgan Chase paid $614 Million to settle allegations that they knowingly provided noncompliant Federal Housing Authority and Veterans Affairs insured loans for over a decade, beginning in 2002. In addition to issuing the noncompliant loans, JP Morgan Chase failed to disclose the results of an internal investigation that concluded they had issued hundreds of loans that should not have been insured by FHA or the VA. When unqualified loans defaulted, the FHA and VA had to cover the losses, even though JP Morgan Chase falsely approved them in the first place.
Johnson & Johnson
Johnson & Johnson paid $2.2 billion to resolve criminal and civil liability arising from allegations relating to kickbacks and off-label marketing of the drugs Risperdal, Invega and Natrecor. Risperdal’s illegal sales practices began when the drug was off-label marketed by its Janssen subsidiary, whose vice president of sales, Alex Gorsky, is now CEO of Johnson & Johnson. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
Life Care Centers of America
Life Care Centers of America Inc. agrees to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled.Merck:In January 2008, Merck settled the very first nominal pricing fraud case where the company was accused of taking kickback and violating Medicaid best price regulations for Vioxx (an arthritis drug), Zocor (a cholesterol drug), Pepcid (an acid-reflux drug), Cozaar (a hypertensive medication), Fosamax (a bone loss drug) Maxalt (a migraine medication) and Singulair (an asthma medication).
Merck paid $628 million to resolve allegations that its representatives made inaccurate and misleading statements about the drug Vioxx’s cardiovascular safety in order to increase sales. Merck also made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. In addition to the civil penalty, Merck was found guilty of criminal charges that resulted in a $950 million total penalty.Mylan IncMylan Inc. agrees to pay $465 million to resolve claims that they violated the False Claims Act by knowingly misclassifying EpiPen as a generic drug to avoid paying rebates owed primarily to Medicaid.Pfizer:Pfizer paid a total of $2.3 billion, of which $1.3 billion was a criminal fine for kickbacks and off-label marketing and $1 billion was paid under the False Claims Act. The drugs involved were Bextra (an anti-inflammatory drug), Geodon (an anti-psychotic drug), Lipitor (a cholesterol drug), Norvasc (anti-hypertensive drug), Viagra (erectile dysfunction), Zithromax (antibiotic), Zyrtec (antihistamine), Zyvox (an antibiotic), Lyrica (an anti-epileptic drug), Relpax (anti-migraine drug), Celebrex (anti-inflammatory drug), and Depo-provera (birth control).
Shire PLC and subsidiaries of Shire PLC will pay $350 million to settle federal and state False Claims Act allegations that Shire and the company it acquired in 2011, Advanced Bio Healing (ABH), employed kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product “Dermagraft,” a bioengineered human skin substitute approved by the FDA for the treatment of diabetic foot ulcers.Tenet:In July 2006, Tenet Healthcare (formerly known as NME) agreed to pay the Federal Government $900 million for billing violations that include manipulation of outlier payments to Medicare, as well as kickbacks, upcoding, and bill padding. The DoJ press release notes that the settlement was based on the company’s ability to pay; a nice way of saying that Tenet stole more money than was recovered in this settlement.
Wells Fargo agrees to pay $1.2 billion for improper mortgage lending practices, admitting that it certified that loans were eligible for FHA mortgage insurance when they were not, and that it did not disclose thousands of faulty mortgage loans to the Department of Housing and Urban Development.
Wyeth and Pfizer
Wyeth and Pfizer paid $784.6 million to resolve allegations that Wyeth knowingly reported to the government false and fraudulent prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV. Pfizer, which is headquartered in New York City, acquired New Jersey-based Wyeth in 2009, approximately three years after Wyeth had ended the conduct that gave rise to the settlement.