This sum accounts for nearly three quarters of all the money it obtained over the past fiscal year, it said, adding that since 1986, when Congress amended the False Claims Act to provide further whistleblower incentives and protections, the U.S. government has recovered more than $64 billion.
“Whistleblowers with insider information are critical to identifying and pursuing new and evolving fraud schemes that might otherwise remain undetected,” said Acting Assistant Attorney General Jeffrey Clark.
“These individuals often make substantial sacrifices to bring these schemes to light, and our efforts to protect taxpayer funds continue to benefit from their actions,” he added.
The U.S. False Claims Act – the main litigation tool used by the government to prosecute individuals and companies that defraud it offers whistleblowers anywhere between 15 and 30 percent of the recovered sum.
The DoJ said that whistleblowers filed 672 lawsuits – nearly 13 cases per week – for which they were compensated a total of $309 million over the fiscal year.
While these payouts have been criticized, there appears to be a growing consensus that they are an important incentive and insurance mechanism for those who are willing to speak out, often against employers who may seek retribution afterwards.
Former Attorney General Bill Barr once called the False Claims Act’s reward system an “abomination,” which he said fueled the “mercenary motives of private bounty hunters.”
However, while in office, Barr softened his tone and acknowledged the importance of providing whistleblower rewards, reportedly saying in private that his previous views had become outdated. When questioned by Congress in 2019, he promised to “diligently” enforce the program and said that he believed that it ultimately protected the American taxpayer.
The DoJ report noted that of the more than $2.2 billion recovered over the past fiscal year, over $1.8 billion were related to fraud committed by the healthcare industry, and that the largest recuperations came from pharmaceutical companies.
After years of litigation, the DoJ said that its case against Novartis Pharmaceuticals Corporation was one of the largest fines that it imposed in 2020. It received in this case more than $591 million over allegations that Novartis paid kickbacks to doctors to prescribe its drugs, and that it paid “speakers” to encourage presibers to also sell its product.
“The continued success of the department’s False Claims Act enforcement efforts are a testament to the dedication of the civil servants who pursue these important cases as well as to the fortitude of whistleblowers who report fraud,” said Acting Assistant Attorney General Clark.
As reported by OCCRP last month, the recently passed U.S. national defense bill includes legislation that seeks to adopt a program similar to the False Claims Act in order to encourage whistleblowers to provide evidence of money laundering violations.
