FY 2012 Is Record Year for FCA Recoveries

In fiscal year 2012, federal and state False Claims Act cases returned over $9 billion back to the government.  This sum consists of criminal fines as well as several large state False Claims Act settlements, including over $300 million recovered by the State of California in a single Medicaid HMO case.

Notes Kristin Amerling, President of Taxpayers Against Fraud:  “The False Claims Act is working exactly as it should, forging a public-private partnership that incentivizes integrity and discourages wrongdoing, even as it works to keep government and law enforcement more efficient.”

FY 2012 saw increased recoveries under state False Claims Act laws patterned after the federal statute, as well as increased criminal fines associated with larger federal False Claims Act cases.

“While health care fraud still represents the bulk of False Claims Act recoveries at both the state and federal level,” said Amerling, “we are starting to see new areas of inquiry open up, especially in the banking, mortgage, and pension arenas, where state action may bring real dividends.” 

The largest recovery in FY 2012 came from the company with the largest False Claims Act settlement in FY 2011, GlaxoSmithKline.  FY 2012 also saw a major award paid under the IRS whistleblower program and the first case settled under the SEC whistleblower program.  Both programs are modeled on the federal False Claims Act.

“At a time when federal and state governments are facing fiscal challenges, whistleblower programs offer the American people a win-win:  billions of dollars recovered, and future frauds deterred.”

Just one week into the new fiscal year, it is too early to predict 2013 False Claims Act recoveries, but $3.5 billion in already-reported False Claims Act settlements lie just ahead.

A chart of top 30 FCA recoveries in FY 2012 follows.  Of these 30 recoveries, 28 are whistleblower-initiated.

 

Top 30 False Claims Act Settlements of FY 2012

Company

 Total Settlement

Claim and Additional Notes

Case Initiated By

GlaxoSmithKline

 $3,000,000,000 

Illegal marketing of nine different prescription drugs, including Wellbutrin, Paxil, Avandia, Advair, Zofran, Imitrex, Lamictal, Lotronex, Floven, and Valtrex.  Settlement includes $2 billion civil, and $1 billion criminal.

Whistleblowers

Abbott Laboratories

$ 1,500,000,000    

Off-label marketing of Depakote.  Settlement includes $800 million civil, and $700 million criminal.

Whistleblowers

Bank of America

 $1,000,000,000

Mortgage and bank fraud. 

Whistleblowers and Federal Government

Merck

 $950,000,000        

Illegal marketing of Vioxx.  Settlement includes $628.4 million civil, and $321.6 million criminal.

Whistleblowers

Senior Care Action Network

 $323,670,000        

California Medicaid fraud case.  HMO cost reporting fraud.

Whistleblowers

Actavis

 $202,600,000        

National settlement after trial loss by company in a Texas state FCA case dealing with Average Wholesale Price (AWP).

Whistleblowers

Deutsche Bank

 $202,300,000       

False certification for HUD/FHA loans.

Federal Government

Oracle

 $199,500,000       

Failure to provide discount pricing as required.

Whistleblowers

McKesson

 $190,000,000        

Inflating prescription drug price information.  This is the federal part of the McKesson case detailed below.

Whistleblowers

Citigroup

 $158,000,000        

FHA home loan approval fraud.

Whistleblower

Johnson& Johnson

$158,000,000        

Off-label marketing of Risperdal.  Texas case, settled in the middle of a trial.

Whistleblower

McKesson

 $ 151,000,000       

Inflating inflated prescription drug price information.   This is a 29-state settlement that is part of the McKesson case noted above.

Whistleblowers

Sandoz

 $150,000,000        

AWP case never joined by DOJ.   Most of the settlement money went to CA and FL.

Whistleblowers

WellCare Health Plans

 $137,500,000        

Price-gouging, knowingly retaining Medicare and Medicaid overpayments, cherry-picking.

Whistleblowers

Bank of America, JPMorgan, Wells Fargo, and Citigroup

 $95,000,000          

Mortgage and bank fraud.

Whistleblowers

Bank of America

 $75,000,000         

Mortgage and bank fraud.

Whistleblowers

New York City and State

 $70,000,000          

Home healthcare upcoding.

Whistleblowers

LHC Groups

 $65,000,000          

Home healthcare provider billing fraud.

Whistleblowers

 

Mylan

 $57,000,000         

California False Claims Act case dealing with AWP.

Whistleblowers

DaVita

 $55,000,000          

Texas settlement dealing with Epogen over-fill  kickback.

Whistleblowers

Harbert Corporation

 $47,000,000         

Settlement of price-gouging in 1990s-era USAID construction contract.

Whistleblowers

JPMorgan Chase

 $45,000,000          

Mortgage and bank fraud.

Whistleblowers

Orthofix International

$43,000,000           

Illegal marketing of a bone growth stimulation device and illegal kickbacks.

Whistleblowers

MetLife

$40,000,000         

Unclaimed benefit / escheatment in MN insurance case.

Whistleblowers

ATK Launch Systems

$37,000,000          

Dangerous and defective illumination flares sold to the Army and the Air Force.

Whistleblowers

Blackstone Medical

 $32,000,000          

Illegal marketing of a bone growth stimulation device and illegal kickbacks.

Whistleblowers

Maersk Line

 $31,900,000          

Submitting inflated cargo invoices for goods shipped to U.S. troops in Afghanistan and Iraq.

Whistleblowers

GE Healthcare

 $30,000,000           

Diluting cardiac diagnostic drug.

Whistleblowers

Odyssey Healthcare

 $25,000,000            

Billing for hospice care not legally covered by Medicare.

Whistleblowers

Merck

 $24,000,000          

Price-gouging on Medicaid drugs to Massachusetts.

State Government

Medtronic

 $23,500,00

Cardiac defibrillator and pacemaker fraud.

Whistleblowers

TOTAL

$9,094,474,000

 

 

Note:  Approximately 100 other False Claims Acts, totaling approximately $150 million, were settled in FY 2012.
 

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