Justice and Law Enforcement:
Information on False Claims Act Litigation
GAO-06-320R: Published: Jan 31, 2006. Publicly Released: Mar 2, 2006.
The False Claims Act (FCA) is one of the government's primary weapons to fight fraud against the government. The Act, as amended in 1986, provides for penalties and triple damages for anyone who knowingly submits or causes the submission of false or fraudulent claims to the United States for government funds or property. Under the FCA's qui tam provisions, a person with evidence of fraud, also known as a whistle blower or relator, is authorized to file a case in federal court and sue, on behalf of the government, persons engaged in the fraud and to share in any money the government may recover. The Department of Justice (DOJ) has the responsibility to decide on behalf of the government whether to join the whistle blower in prosecuting these cases. From fiscal years 1987 through 2005, settlements and judgments for the federal government in FCA cases have exceeded $15 billion, of which $9.6 billion, or 64 percent, was for cases filed by whistle blowers under FCA's qui tam provisions. The whistle blowers share of the qui tam settlements and judgments was over $1.6 billion during this period. With regard to a Congressional request to provide information on FCA litigation, this report addresses the following questions: (1) What statutory guidance and DOJ policies exist regarding the relationship between the government and relators in prosecuting qui tam cases? and (2) What is known about DOJ's qui tam caseload based on the data it collects?
Under the FCA, the federal government has primary responsibility for prosecuting a qui tam case and it is at the DOJ's discretion to involve the relator on a case-by-case basis. DOJ officials told us that their policy is broad and encourages DOJ attorneys to recognize the benefits of a cooperative relationship with relators and to exercise their professional judgment in dealing with them. DOJ does not collect data that document the extent of the relator's participation in the prosecution of a qui tam case, nor is it required to do so. DOJ's Civil Division received 8,869 FCA cases from fiscal years 1987 through 2005. During this period, the number of qui tam FCA cases generally increased as a proportion of total FCA cases. Agencies under the Departments of Health and Human Services and Defense were named more frequently than other agencies as allegedly defrauded in qui tam cases DOJ received. The 2,490 closed, unsealed qui tam cases that GAO analyzed were filed in 92 U.S. district courts. Health care and procurement fraud cases constituted about 79 percent of all qui tam cases. DOJ pursued health care fraud cases (33 percent or 363 of the total 1,117 health care cases) and procurement fraud cases (29 percent or 237 of the total 819 procurement cases) more than other types of fraud cases. Cases in which DOJ intervened took a median of 38 months to conclude and ranged from 4 months to 187 months. The median FCA recovery in a qui tam case was $784,597, of which the median relator share was $123,885. Recoveries and relator's share amounts in health care fraud cases were larger than in other types of fraud. Recoveries and relator share amounts were greater in cases where DOJ intervened than in cases where DOJ declined to intervene.