Weeding Between the Lines of DOJ’s Statistics on False Claims Act Fraud Recoveries

Weeds, in the most generous definition, are plants in the wrong place. Anyone with aspiration to be a green thumb knows how the joy of planting seeds and watching them grow quickly becomes an ongoing battle to keep the weeds out of a treasured pot, bed, or field. Keeping the weeds at bay so that your chosen crop can flourish requires constant vigilance.

Fraud is a weed. Unfortunately, keeping the fraud weed out of government contracting also requires constant vigilance in every government contract. Unless and until we pull the fraud weed out entirely and make sure its seeds don’t scatter, it’s going to pop up in another place and become a nuisance wherever it lands.

The Department of Justice is the federal agency with primary responsibility to weed out fraud in all government programs, from healthcare and defense to the litany of other programs and initiatives funded by taxpayer dollars.  For more than 30 years the government’s primary weed whacker has been the False Claims Act, and each year DOJ reports on its False Claims Act settlements and recoveries.  

We start Fraud by the Numbers 2022 with a look at DOJ’s statistics for 2021 and the work that’s still to be done if we’re going to get ahead of the fraud weed and let good government flourish.

In 2021 DOJ recovered more than a reported $5.6 billion in settlements and judgments from civil cases involving fraud and false claims, the second largest fraud recovery ever.  Standing alone, that’s a big number.  But what a $5.6 billion recovery says about how well we are doing in our fight against fraud depends a lot on perspective.  If you are an average American, finding yourself with $5.6 billion would land you on the Forbes list of billionaires (tied for 471st place).  From that perspective, $5.6 billion is pretty great!  If you are the US government, $5.6 billion buys you less than half an aircraft carrier.  Less great.

Another important take-away from the impressive $5.6 billion recovered in 2021 is that just $600 million was attributed to settlements and judgments in civil cases involving non-healthcare contracting. Non-healthcare contracting is just as susceptible to fraud as other programs. For example, later this month we will talk about the billions lost to COVID-19 fraud, including through the Paycheck Protection Program, where self-certification procedures may have increased risk of fraud.

In order to evaluate the fraud risk, therefore, it’s imperative to understand what the government contracts to buy.  And, according to the Government Accounting Office, the federal government buys a lot more than healthcare each year.

So what’s the takeaway from the 2021 statistics? Every recovery – and every whistleblower who made a recovery possible for the government–helps the cause.  But just like pulling weeds in the garden, none of us should be satisfied with the fraud weeds that have been pulled when there are more out there still growing amuck.  In the days and weeks ahead, we will describe all the places where the fraud weed is flourishing notwithstanding billions in recoveries secured by DOJ with ongoing support by whistleblowers.

We hope the series is instructive and inspiring.

Written by Kate Scanlan of Keller Grover LLP. Edited by Regina Poserina of Cohen Milstein Sellers & Toll PLLC and Liz Soltan of Constantine Cannon. Fact checked by Julia-Jeane Lighten of Taxpayers Against Fraud.