In fiscal year 2012, the Justice Department recovered nearly $5 billion in False Claims Act (FCA) settlements and judgments, a single-year high, and the second straight year DOJ set a new record. If you are a government contractor, receive payments from the federal government, or operate a government program (or one with the government’s imprimatur), you are subject to DOJ’s greatly enhanced civil fraud recovery program on every front.
Perhaps of most importance to the private sector is that $3.3 billion of the $5 billion came from a record 647 whistleblower (or qui tam) suits brought by private citizens. The lesson to be drawn from this is that a company subject to fraud claims actions by the federal government should consider every one of its employees as a potential agent of the U.S. Government. Remember, the whistleblower receives up to 30% of the government’s recovery. A company should order its internal controls accordingly and take all reasonable steps to ensure that it meets the government’s accounting and auditing standards.
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