Helping the Government Protect What’s Right

Every time a Qui Tam action results in another settlement or verdict for the government, we, the taxpayers, benefit. Yet without enlisting the help of private individuals, our government would never have the resources to identify and put a stop to the fraudulent schemes perpetrated against it by a host of unscrupulous corporations. False Claims Acts have created a framework within which government lawyers and investigators are able to work in tandem with whistleblowers and their attorneys, like Baron & Budd, to pinpoint and prove the case against companies that profit by bilking government agencies out of taxpayer dollars. Because these statutes authorize the recovery of treble damages and penalties from the companies committing the fraud, we—the taxpayers—are not billed for the investigation or the prosecution of Qui Tam suits. The Qui Tam law has proven so successful that in the single area of Medicare fraud, as an example, for every dollar the federal government spends on False Claims Act cases, it receives fifteen dollars in return, according to a 2006 study commissioned by the Taxpayers Against Fraud Education Fund and conducted by the Economic and Social Research Institute.

Qui Tam litigation is not just a smart way to recover taxpayer dollars lost to corporate fraud, however. The partnership between private individuals and government officials to work together on Qui Tam claims is actually putting an end to fraud before it begins. As observed by Sen. Charles Grassley (R-IA) and Rep. Howard Berman (D-CA), who spearheaded the 1986 amendments to the False Claims Act: “Studies estimate the fraud deterred thus far by the qui tam provisions runs into the hundreds of billions of dollars. Instead of encouraging or rewarding a culture of deceit, corporations now spend substantial sums on sophisticated and meaningful compliance programs. That change in the corporate culture—and in the values-based decisions that ordinary Americans make daily in the workplace—may be the law’s most durable legacy.”

To focus attention on use of the Qui Tam law to protect what’s right for taxpayers, the federal government has begun formal public awareness efforts. For example, the Deficit Reduction Act of 2005 requires any entity that receives or pays a minimum of $5 million annual state Medicaid funds to provide a false claims employee education program outlining federal and state False Claims Acts and whistleblower rights and protections. The National Procurement Fraud Initiative of the Department of Justice similarly strives to uncover and prosecute federal procurement fraud under the False Claims Act. Further, the Department of Defense and the Environmental Protection Agency require businesses receiving government contracts in excess of $5 million to employ various anti-fraud measures, including a written code of ethics, training procedures and internal controls.

The Deficit Reduction Act of 2005 also includes a provision that provides incentives to those states that pass False Claims Acts and to those that strengthen their existing False Claims Acts to be at least as effective in fighting Medicaid fraud as is the federal False Claims Act. This has already resulted in the passage of additional state False Claims Acts and in strengthening existing state laws. Working together with the federal and state governments and Qui Tam plaintiffs, Baron & Budd is “Protecting What’s Right.”