The Justice Department has announced that in fiscal year 2008 alone, it has recovered over $1.3 billion from contracting fraud cases filed under the federal False Claims Act. According to DOJ, the government has recovered $21 billion from civil fraud suits filed under the Act since the statute was strengthened in 1986.

Gregory G. Katsas, Assistant Attorney General for DOJ’s Civil Division, explains that the False Claims Act serves not only to recover funds swindled by contractors, but also to deter contractors who might otherwise attempt fraudulent schemes against the government. The False Claims Act provides whistleblowers—called relators—with an incentive to report fraud by awarding them with a portion of any funds recovered by the government due to a False Claims Act suit. The incentive is found in the Act’s Qui Tam provision. In 2007, whistleblowers received a hefty chunk of the government’s recoveries in federal Qui Tam litigation.

In the past few years, most of the Qui Tam litigation has centered around health care fraud, particularly Medicare and Medicaid fraud cases. The largest recoveries were paid by drug companies and related entities.

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