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FCA Stats Show $3 Billion Earned Via Qui Tam Cases

The U.S. Department of Justice just released its latest statistics on the cottage industry we like to call the Federal False Claims Act.

Thanks to Taxpayers Against Fraud for posting it so fast. You can find a pdf copy of the report on their website.

This is an educational document and should be read very closely.

First of all, in 2013, there were 753 federal cases filed by individuals under the so called “qui tam” provisions of the law. That is the highest number of cases filed by individuals since the law was brought back to life by the 1986 amendments. It is 100 more cases than the total filed in 2012. The government itself filed an additional 93 cases, which is down from the previous year significantly.

While this represents a large increase and a steady growth in the number of cases filed over the years, it still seems like a relatively low number of cases to me. This is a big country, and that is still just a little more than two cases filed per day.

Having said that, these numbers do not include state False Claims Act cases being filed (and lawyers are just beginning to pursue those cases) nor do they include filings under the brand new SEC or Commodity Futures Trading Commission’s whistleblower offices. So, overall whistleblower reward filings may in fact be up by far more than these statistics would suggest, especially when compared to ten years ago.

Cases like these take a long time to resolve. So the statistics on how much money was obtained in 2013 reflect filings from a few years ago. We should see continuing increases based on the increased number of cases being filed. In any event, last year was a lucrative year for the government under this law. Just shy of $3 billion was won on qui tam cases, including cases filed by the government and that figure rises to almost $4 billion.  I would point out that for all the sky-is-falling, capitalism-is-under-threat talk coming from the likes of the Wall Street Journal and the Chamber of Commerce, $4 billion is not really that much compared to the U.S. budget. If I read the document from the White House correctly the total amount of our nation’s budget, which is on page 69 of this pdf document, was more than $1.5 trillion in 2013.

Friends, that is .0276 percent. So, the whole world is afraid of whistleblowers and qui tam lawyers and the U.S. Department of Justice, and yet we have not managed to collect three-tenths of one percent of the budget of the United States for government fraud violations.

Look around and you tell me. Do you really think only three-tenths of one percent of the U.S. Federal Budget is lost to fraud in a year? That percentage is going to be even lower in comparison with state budgets, even in states that let you sue for any kind of fraud. Contrary to the sentiment of the-sky-is-falling defendants, we on the qui tam bar side still have a lot more work to do.

I note with sympathy the degree to which the government is understaffed to keep up with the continuing increase in cases filed.  There are more lawyers working on these cases than ever before.  They do a good job in bringing cases that they at least think have merit for the simple reason that only meritorious cases really have a chance of succeeding with this law.  That means a bunch of new false claims cases is an awful lot more work for the DOJ. If you want to see the government collect more money under the False Claims Act hiring more investigators and attorneys would be a good place to start.