For the fiscal year which ended September 30, 2012 more than $9 billion in civil settlements and criminal fines was recovered by federal and state governments through False Claims Act cases. Moreover, twenty eight out of the thirty largest recoveries were from cases filed by whistleblowers. Not only does this represent a record amount, it more than doubles the previous record set in 2011 of $4 billion, and exceeds the total recoveries over the past three years.
This trend in recoveries is consistent with the increase in cases filed under the qui tam provisions of the False Claims Act over the last three years. In 2009, 433 qui tam cases were filed. In 2010, a record 573 cases were filed, and in 2011, an unprecedented 638 cases were filed by whistleblowers.
Legislative changes designed to encourage suits under the FCA account, at least in part, for the increase in the number of cases filed. In 2009, the Fraud Enforcement and Recovery Act (FERA) was passed, which made several favorable changes to FCA provisions. In 2010, the Patient Protection and Affordable Care Act (PPACA) contained provisions which made it easier for whistleblowers to pursue health care fraud cases. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 strengthened protections for whistleblowers. The increase in recoveries is probably also due to increased enforcement efforts by government entities, including the Justice Department, the SEC, and the IRS.
It is likely that the trend in recoveries will continue. There are already $3.5 billion in settlements reportedly in the pipeline in the new fiscal year.
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