DOJ Announces Over $3.5 Billion in Fraud Recoveries in FY 2015
DOJ recently announced that it recovered over $3.5 billion in settlements and judgments from civil fraud cases in the fiscal year ending September 30, 2015. That recovery falls well short of the $5.69 billion that DOJ recovered in FY 2014, though it is still the fourth-greatest annual fraud recovery ever.
The majority of the total came from the health care industry, which accounted for $1.9 billion of the settlements and judgments; the next most significant sectors were government contracting and federal procurement at $1.1 billion and housing and mortgage fraud at $365 million. The health care total, which only includes federal losses, included $330 million from cases involving hospitals and $96 million from the pharmaceutical industry. DOJ’s press release also cites the Yates Memo (which we have discussed previously) and refers to recoveries from individuals in “an array of cases.” FY 2015 ended a five-year streak in which the government had recovered at least $2 billion from the health care industry annually, though this is undoubtedly an anomaly and should not suggest that enforcement in the healthcare sector is waning.
Over two-thirds of the year’s recovery – $2.8 billion – came from whistleblower qui tam suits, including from some of the 638 such suits filed in FY 2015. Relator awards in that period totaled $598 million, the highest ever. Further, over $300 million of that total relator award derived from suits in which DOJ did not intervene; the previous record for highest annual total relator award when DOJ declined to intervene was $49 million in FY 2011. As the chart below shows, the proportion of the total fraud recovery resulting from qui tam suits in which DOJ did not intervene was higher than in any previous year.
(click to enlarge)