Feds Collect Record Amount Under False Claims Act

Led by a record-breaking legal settlement with drugmaker GlaxoSmithKline, federal collections from civil False Claims Act prosecutions and settlements exceeded all previous years, topping $4.9 billion in the most recent fiscal year.

The biggest single chunk–more than $3 billion–came from healthcare companies accused of defrauding Medicare and other government healthcare programs. Fiscal 2012 marked the first time that healthcare tallies topped $3 billion.

The False Claims Act is a federal statute designed to encourage whistle-blowers to file lawsuits when they have insider knowledge of companies defrauding the government. The act was overhauled in 1986, and has since become the most powerful tool that the Federal government has to deter and redress fraud.

The law carries significant financial penalties, including $11,000 per violation and up to triple the original damages to the government. It also allows whistle-blowers who come forward with non-public information to collect up to 30% of the total settlement. Most FCA cases are brought by whistle-blowers on behalf of the government.

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