The Department of Justice recovered $1.34 billion in settlements and judgments in FY 2008 from pursuing allegations of fraud. More than $21 billion has been recovered since 1986, when Congress (thanks to Senator Grassley (R-IA)) substantially strengthened the civil False Claims Act (FCA). POGO's Federal Contractor Misconduct Database has over 70 instances involving the False Claims Act since 1995, totaling more than $1.5 billion in recoveries.
The FCA continually comes under fire for penalizing innocent mistakes and for the treble damages provision from health care providers and defense contractors that make up for the vast majority of FCA recoveries. Congress, however, has not only been able to fight off those efforts, but has introduced legislation to further strengthen the fraud fighting tool.
Although DOJ's annual announcement is reason to applaud government actions to fight fraud, there is still a lot of room for improvement. According to DOJ statistics, approximately 1000 qui tam cases were pending under seal in early 2008 (the current number is about 700 cases). Those numbers included approximately 150 cases involving the pharmaceutical industry and another "230 alleg[ing] procurement fraud, including approximately 135 cases in which the Department of Defense is the primary agency." Equally important are the approximately "30 qui tam cases under investigation and under seal" involving Iraq contracting fraud.
Many are expecting that the Obama Administration will dislodge that backlog. I'll go out on a limb and predict that DOJ's 2009 fraud recovery will approach the previous recovery record.
-- Scott Amey