Does the Department of Justice Have the Resources to Tackle Fraud?

Fiscal Year 2022 saw the most new cases filed under the False Claims Act in the Law’s modern history. Does the DOJ have the resources to handle the job?

One aspect of the Department of Justice’s efforts to fight fraud stands out as being far more active in recent years. DOJ is now initiating more False Claims Act cases on its own or through agency referrals, without information from whistleblowers.. In 2013, the DOJ filed 117 such “non qui tam” matters, but ten years later in 2022 it filed 296, or two and a half times as many.  That is the second most number of FCA cases the DOJ has ever filed on its own, and you have to go back to 1993 to see a year when the DOJ filed more. In 1993, the DOJ initiated 304 cases.

However, in the mid-nineties the FCA was still relatively unknown to the public, and data shows far fewer cases were initiated by whistleblowers.  There were just 138 qui tam cases filed in 1993 for a total of 442 False Claims Act cases that year.

In fact, 2022 is a high-water mark with a total of 948 cases filed by the Government and whistleblowers under the FCA.  As we explained earlier this month, the number of qui tam filings is modest by any measure, and especially in comparison to the number of civil cases filed in the country.  Of the 309,102 new civil cases filed in the U.S. in 2022, only 652 were qui tam actions.[1] No matter how these cases are originated, the total number means the DOJ is overseeing twice as many new FCA matters as in 1993, according to the most recent report from the DOJ.[2]

With a potential government shutdown looming, we don’t know yet what DOJ’s resources will be to do this important work in the upcoming fiscal year. The President’s budget for 2023 includes some increases in the DOJ Discretionary budget including a proposed increase for “Law Enforcement and US Attorney’s Office” of 6.4% and an increase in “Litigating Components” of 12.0%. The overall Budget for the Department would be $37.6 billion in FY 2023, up from $35.3 billion in 2022, according to the DOJ’s FY 2023 Budget Summary.

It is a hopeful sign to see the DOJ pursuing more fraud cases in general, and we will all wait to see how much is approved to wage this important battle when the budget is ultimately approved.  Whatever amount is funded in FY 2023, it can always use more.  That’s why the Government needs the assistance of whistleblowers to supplement the government’s resources, as contemplated by the FCA.

Tony Munter heads the Whistleblower Reward Practice at Price Benowitz, LLP

[1] The 652 filed by whistleblowers in 2022 is neither the highest or lowest amount filed in the last 10 years, and the average amount is slightly higher at 672, so there has been a relatively constant supply of whistleblower filed FCA cases in the last decade. Because it is a modest number, there is no reason to expect a precipitous drop in future whistleblower filings.

[2] The 2022 number of cases filed by DOJ is not an aberration, but the numbers say it is a trend.  The DOJ filed 769 non qui tam matters in the most recent three years reported 2020, 2021 and 2022, and two thirds more cases than the 460 cases the DOJ filed in the previous 3 years 2017, 2018 and 2019.