False Claims Act

The Federal False Claims Act is a long-standing whistleblower program that since 1987 has recovered over $35 billion from corporations and individuals who have submitted false claims to the federal government, either directly or by submitting false claims to third parties who in turn bill the federal government. Of the $35 billion recovered, $24.3 billion has been recovered as a direct result of whistleblower actions, also known as qui tam actions. In fiscal year 2013 alone, the United States recovered $2.9 billion from whistleblower lawsuits, with the whistleblowers themselves receiving $345 million.

Recent Cases

In August 2013, manufacturing corporations agreed to pay $60.9 million to resolve allegations that they failed to provide the GSA (General Services Administration) with price discounts provided to other customers, marketed generic products as a superior line of the same product, and used a defective product in systems purchased by government customers. The former vice president of one of the corporations who filed the whistleblower complaint received more than $10 million.

In May 2013, a drug manufacturer agreed to pay $600 million to settle criminal and civil charges for distributing adulterated generic medications, submitting false statements to the FDA regarding drug testing, and keeping inadequate records of drug testing and stability. The company executive who initiated the whistleblower complaint received $48.6 million.

In February 2013, a physician agreed to pay $26.1 million to resolve allegations that he accepted kickbacks from a laboratory, received Medicare payments for work he did not perform, performed medically unnecessary procedures that increased business for the laboratory, and performed additional medically unnecessary procedures in order to receive Medicare reimbursements. The whistleblower, a physician who worked at the laboratory, received over $4 million.

In December 2012, Amgen, a biotechnology corporation, pled guilty and agreed to pay $762 million to the United States to resolve criminal and civil charges. The United States and numerous whistleblowers charged that Amgen intentionally misbranded – in other words, trained its sales representatives to promote off-label use of – a specific medication. The FDA had previously considered and rejected dosages at the levels promoted by Amgen and had never approved another treatment Amgen encouraged. This action was originally brought by whistleblowers in several states.

In December 2012, a hardware distributor agreed to pay $70 million to resolve charges that it misrepresented its commercial pricing policies to the General Services Administration (GSA), causing government customers including the United States Postal Service to overpay for purchases made from the distributor.

In August 2012, the United States joined a whistleblower lawsuit against The Gallup Organization based on a complaint that Gallup gave the government inflated estimates of the number of hours that it would take to perform its services even though it had its own lower internal estimates. The complaint alleged that the government paid Gallup based on the inflated estimate, not the lower internal estimate.

In February 2012, a landlord paid $42,900 to settle claims that he received federal housing assistance payments while requiring tenants to pay illegal supplemental payments. A tenant who had been illegally required to pay supplemental payments filed a whistleblower complaint that initiated the action.

In 2005, OfficeMax agreed to pay the United States $9.8 million to settle allegations that it sold products from countries that do not have reciprocal trade agreements with the United States even though its contract with GSA prohibits it from offering products from such countries for sale. Whistleblowers who filed the complaint received $1.47 million.