Monthly Archives: December 2014

Department of Justice Data Shows 2014 Was A Year to Remember for the False Claims Act

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The government’s fiscal year ended at the end of September, closing the books on 2014 for the Department of Justice’s annual public statement on the False Claims Act, which the Justice Department released on November 20, 2014.

The Justice Department’s report shows that 2014 was the best year yet based on the amount of money recovered under the False Claims Act, eclipsing the past record by almost $700 million dollars. In 2012, the False Claims Act brought in almost $5 billion in recoveries; in 2014, recoveries neared $5.7 billion.

A Lot More of the Same, But a Little New

The Justice Department’s report showed that a lot of the past trends continued in 2014, although there were some interesting new developments.

It’s All About Whistleblowers

Since 2007, recoveries in cases brought by whistleblowers have exceeded the recoveries in cases initiated by the government alone, with the gap widening nearly every year. Yet again, in 2014, lawsuits brought by whistleblowers accounted for the largest share of the Justice Department’s recoveries. For the second year in a row, new whistleblower lawsuits topped the 700 mark.

Healthcare Recoveries Were Big

For the fifth straight year, recoveries under the False Claims Act in the healthcare field exceeded $2 billion dollars. The government announced a number of eye-popping settlements, as it is has done repeatedly over the past half-decade. These settlements included Johnson & Johnson’s agreement to pay $1.1 billion to settle claims relating to the prescription drugs Risperdal, Invega and Natrecor.

But Recoveries from Financial Institutions Were Bigger

In one of the more interesting new developments, 2014 recoveries from financial institutions actually exceeded healthcare-related recoveries. While healthcare companies shelled out $2.3 billion in settlements under the FCA in 2014–an impressive number–financial institutions paid more than $3.1 billion in settlements last year. For example, Bank of America agreed to pay $1.85 billion to settle claims relating to loans it sold to¬†Fannie Mae and Freddie Mac. Time will tell whether this is a one-year exception to the recent dominance of healthcare recoveries, or whether financial institutions will remain a top target of whistleblowers and the Justice Department.