2014 was a banner year for federal recoveries under the False Claims Act (“FCA”). In a press release dated November 20, 2014, the DOJ announced that its total recoveries – including those from both settlements and judgments – amounted to $5.69 billion for the fiscal year ending September 30th. These results mark the first time that annual recoveries have exceeded $5 billion, and they continue a recent trend of aggressive FCA enforcement. The FCA is the primary civil statute through which the DOJ combats fraud on the federal Government. It includes qui tam provisions which provide monetary incentives for whistleblowers to file suit directly against wrongdoers. $3 billion of FY 2014’s $5.69 billion recoveries arose from qui tam actions, with the Government paying $435 million to reward the whistleblowers. The number of qui tam suits has exceeded 700 for each of the last two fiscal years, far exceeding the 300 – 400 per year in the period between FY 2000 and 2009.

Housing and mortgage fraud and health care were the two largest sectors for FY 2014 recoveries. DOJ recovered $3.1 billion related to alleged housing and mortgage fraud, and $2.3 billion related to health care fraud. In health care, the Government has continued its aggressive push to combat Medicare, Medicaid, and TRICARE (military health insurance) fraud. This effort is spearheaded by the interagency Health Care Fraud Prevention and Enforcement Action Team (“HEAT”). DOJ has also pursued major recovery cases against companies participating in a variety of federal procurement programs.

Companies that engage in Government contracting or which otherwise receive federal funds should remain cognizant of the DOJ’s continued aggressive FCA enforcement. Companies in the health care sector should remain particularly alert. The HEAT task force has been particularly active, and the Affordable Care Act includes a number of new inducements and protections for whistleblowers who file qui tam actions. It is thus likely that businesses across the health sector will remain in the government’s cross-hairs.