In the fiscal year ending Sept. 30, 2009, the United States recovered $2.4 billion in judgments and settlements from lawsuits alleging fraud against the government. Historically, this is the second largest annual recovery from claims involving civil fraud. Since 1986, when the civil False Claims Act was substantially strengthened, the government has recouped more than $24 billion.

The U.S. Justice Department describes the federal False Claims Act as the United States’ “primary tool against government fraud.” The 1986 amendments to the statute bolstered the Act by sweetening its Qui Tam provisions, which encourage whistleblowers to report fraudulent conduct. Under those provisions, whistleblowers are entitled to collect a significant portion of any recovery the government makes as a result of a whistleblower suit filed by a private individual. In the Fraud Enforcement and Recovery Act of 2009, Congress implemented further improvements to the False Claims Act and additional fraud statutes. According to the Justice Department, these changes clarify and bolster the Act in the face of rulings by several courts that acted to narrow the scope of the statute.

Under the False Claims Act, those who make intentionally false claims for federal funds are responsible to pay three times the government’s actual loss and a civil penalty ranging from $5,500 to $11,000 for each claim made. A whistleblower who initiates a lawsuit on the government’s behalf (a “relator”) is entitled to 15 to 25 percent of any recovery if the government intervenes in the case, and as much as 30 percent should the United States decline, forcing the whistleblower to pursue the action alone. The resulting rewards to relators have been substantial. In fiscal year 2009, whistleblowers received $255 million.

For the full story, go to the Department of Justice’s press release.