False Claims Act

The U.S. Department of Justice celebrated the 25^th anniversary of the 1986 amendments to the False Claims Act today.  The False Claims Act has been called the single most important tool that American taxpayers have to recover funds when false claims are made to the federal government, including health care fraud, mortgage fraud, and procurement fraud.     

“In the last quarter century, the False Claims Act’s success has been unparalleled with more than $30 billion dollars recovered since it was amended in 1986 and $8.8 billion since January 2009,” said Attorney General Eric Holder.  “In these challenging economic times when resources are scarce, government budgets are being tightened and so many Americans are forced to do more with less, the need to act as sound stewards of every taxpayer dollar has never been more clear or more urgent.  The Department of Justice has achieved record recoveries in recent years and we will continue to aggressively pursue those who would take advantage of their fellow citizens.”

The False Claims Act was originally passed by Congress during the administration of President Abraham Lincoln in 1863 to help the government recover federal funds stolen through fraud by U.S. government contractors.   During the Civil War, the law was used to recover monies from unscrupulous contractors who sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions.

In 1986, Congress amended the False Claims Act to permit the government to seek treble damages and revised the statute’s qui tam, or whistleblower, provisions to increase the incentives for whistleblowers to come forward with allegations of fraud.   Since those changes were enacted, the Justice Department has recovered more than $30 billion under the act.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Colorado-based CH2M Hill Hanford Group (CHG) and its parent company CH2M Hill Companies Ltd. (CH2M Hill) admitted to criminal conduct when CHG engaged in years of widespread time card fraud  on the U.S. Department of Energy. Between 1999 and 2008, CH2M Hill had a federal contract to manage and clean 177 large underground storage tanks containing mixed radioactive and hazardous waste at the Department of Energy’s Hanford Nuclear Site in southeastern Washington. The Hanford Site was used for the production of nuclear weapons during World War II and the Cold War. CHG hourly employees involved in the cleanup routinely overstated the number of hours they worked,  and CHG management not only condoned the practice---submitting inflated claims to the Department of Energy that included the fraudulently claimed hours--but certain supervisors engaged in patterns designed to avoid the detection of the routine time card fraud by law enforcement and internal auditors.  So far, eight individuals have pleaded guilty to the fraud scheme and conspiracy.

CH2M Hill will pay $16.5 million to resolve its civil liability under the False Claims Act, refund an additional $1.95 million in wrongfully obtained profits, dedicate $500,000 to increasing accountability at the Hanford site, and pay for independent monitoring.  The allegations were originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Carl Schroeder, a former employee of CH2M Hill, and one of those to plead guilty to the scheme.  Under the False Claims Act, private citizens can sue on behalf of the United States and share in the recovery.   The act, however, bars whistleblowers from recovering if they were convicted based on their role in the scheme.  Thus, Schroeder will not receive any share of the recovery.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

A jury ordered a nursing home in Illinois to pay a total of $29 million in penalties for false Medicare claims to the government.  Two former employees at the facility filed a complaint that the home allegedly destroyed and/or forged records to make it appear that residents were receiving appropriate care and medications, while residents allegedly went without food or medication, developed bedsores and scabies, and were left to lie in their own waste.  The jury found that the government suffered losses of over $3 million due to the submission of over 1,700 false Medicare claims and awarded the maximum penalty of $11,000 for each false claim.  The two whistleblowers received $400,000.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Healthpoint Ltd. and DFB Pharmaceuticals have agreed to pay up to $48 million to resolve allegations that Healthpoint caused false claims to be submitted to Medicare and Medicaid programs for a non-FDA approved skin ointment, Xenaderm.  The U.S. Department of Justice alleges that Healthpoint misrepresented Xenaderm’s regulatory status in its government reports and knowingly caused false claims to be submitted for the product.

The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private parties with knowledge of fraud to sue on behalf of the United States and share in any recovery.   This settlement is part of a series of recoveries totaling over $100 million from manufacturers of unapproved drugs.   The relator, or whistleblower, Ms. Constance Conrad, is eligible to recover 15% to 30% of the settlement, however, an agreement between the government and Ms. Conrand regarding her award has not been reached yet.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

The Occupational Safety and Health Administration of the U.S. Department of Labor today issued the interim final regulations governing the employee protection (whistleblower) provision of section 1558 of the Affordable Care Act--also known as Obamacare--which added section 18C of the Fair Labor Standards Act, to provide protections to employees of health insurance issuers or other employers who may have been subject to retaliation for reporting potential violations of the law’s consumer protections (such as the prohibition on denials of insurance due to pre-existing conditions) or affordability assistance provisions (such as access to health insurance premium tax credits).  Read the Interim Final Rule.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.