Happy 25th Birthday, False Claims Act Amendments!

I am a whistleblower lawyer representing whistleblowers who know about
fraud against the Government, and who are bringing suits under the False
Claims Act. Recently the Justice Department and members of Congress held
a joint celebration to mark a very important anniversary for the False
Claims Act. According to a web article on the Main Justice site, Justice
Department Celebrates 25 Years of False Claims Act. (2/1/2012), officials
of the Justice Department and Members of Congress met in the Great Hall
at the Department of Justice in Washington,D.C.

The group was celebrating some very important amendments to the False Claims
Act enacted back in 1986, as Congress revived the False Claims Act. The
Act had been passed during the Civil War, championed by Abraham Lincoln
himself, because he was sickened by the fraud against the Government during
the war. During World War II, however, Congress had made the Act toothless.
For nearly forty years, qui tam suits had been virtually eliminated. In
the forty-three year period between 1943 and 1986, only 100 cases were
filed in the entire United States – and nearly all of those lost.

Then, in 1986, the press began to reveal some of the abuses that were draining
funds from the federal government, particularly in the military arena.
The public, and then Congress, again became incensed by the fraud against
the Government. In 1986, Congress reacted with amendments that strengthened
the False Claims Act once again.

With the amendments to the False Claims Act, the Government acknowledged
that it was bleeding green because so many businesses and individuals
were stealing from it. Most of the time the Government never found out
that it had been robbed blind, because people were afraid to report what
knew. People who theoretically could be whistleblowers were afraid that
if they told on their companies, they would lose their jobs. They gave
in to their very real, and very human, fear that they would lose their
jobs – and even their ability to work in their entire industries
– if they came forward to report the fraud they knew was happening.

The amendments acknowledged what kindergarten teachers have known since
kindergarten began – rewarding good behavior creates more good behavior.

The results have spoken for themselves. The Assistant Attorney General
for the Civil Division of the Department of Justice, Tony West, reported
that: “more than $30 billion has been recovered by the government
since 1986 because of the False Claims Act.” The impact of the Act
has increased across the ensuing 25 years: a whopping 30% of the $ 30
billion has come since 1999.

While fraud against the military remains a problem, and defense contractors
have been repeatedly slapped for fraud, by far the greatest amount of
fraud is coming from fraud in the health care sector. West explained that
of the $8.8 billion the Justice Department has recovered since 2009, a
whopping $6.6 million have come from
lawsuits exposing fraud in the medical field.

Recognizing the success of the False Claims Act amendments, since 1986
Congress has strengthened or enacted other statutes that allow the Internal
Revenue Service and the Securities and Exchange Commission to reward whistleblowers.
Furthermore, 29 states have enacted some type of False Claims Act, although
most of the states have quite limited acts.

Sens. Patrick Leahy (D-Vt.) and Charles Grassley (R-Iowa) and Rep. Howard
Berman (D-Calif.), have been instrumental in strengthening the False Claims
Act to allow the Government to recover a portion of the amount stolen
from it each year.