U.S. Closes Record-Breaking Financial Year for False Claims Recoveries

By Katie Hauser

Published on November 28, 2006

Reports show that the government recovered more than $3.1 billion in settlements and judgments against fraudulent companies and individuals. Previously, the largest year for recoveries of this sort was 2003, when the government recovered $2.2 billion as repayment for fraud.

More than $1.3 billion of the money recently recovered involved cases in which citizens filed suit on behalf of the federal government under the False Claims Act. Such cases are commonly known as qui tam, or whistleblower, claims.

Under the False Claims Act, any individual convicted of defrauding the U.S. government by knowingly submitting false claims is liable for three times the amount of the government’s loss, plus a civil penalty for each claim. If the settlement is the result of a whistleblower suit, the person who filed on behalf of the government is eligible to receive up to 25 percent of the amount recovered.

More than one-half of the money recovered over the past fiscal year came from two companies, Tenet Healthcare Corporation and the Boeing Company.

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