In the 2021 Fiscal Year (FY), the U.S. Department of Justice (DOJ) obtained more than $1.6 billion from qui tam whistleblower lawsuits filed under the False Claims Act. According to a February 1 press release, the agency recovered a total of $5.6 billion in settlements and judgments in the most recent FY, which ended on September 30, 2021. In FY 2021, however, the DOJ only paid out $237 million to whistleblowers, the lowest single-year total since FY 2008.
The press release contains information about recoveries the agency made in FY 2021 and reports that the $5.6 billion total is “the second largest annual total in False Claims Act history, and the largest since 2014. Settlement and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $70 billion.”
The qui tam provisions of the False Claims Act allow private citizens to file lawsuits on behalf of the federal government if they have knowledge of someone defrauding the government. In FY 2021, the DOJ received 598 qui tam whistleblower lawsuits, “and this past year the department reported settlements and judgments exceeding $1.6 billion in these and earlier-filed suits,” the press release states. “The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 598 qui tam suits filed this past year – an average of over 11 new cases every week,” the press release reports.
While the number of qui tam suits has grown significantly since 1986, in recent years the amount of money paid out to whistleblowers has dipped. In FY 2014, the DOJ set a record by paying out $715 million to whistleblowers. That year, the DOJ recovered over $4.4 billion from whistleblower-initiated cases. Since then, the amount paid out to whistleblowers has been in decline. The agency has not paid out over $500 million to whistleblowers in a fiscal year since 2017. The $237 million paid to whistleblowers in FY 2021 is the lowest since FY 2008.
“The newly released statistics reflect a troubling trend in recent years,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “The DOJ has begun to treat whistleblowers like second-class citizens. It routinely throws out strong whistleblower cases without just cause. While the SEC and CFTC are making great strides forward with their whistleblower programs, the Justice Department is in reverse.”
Kohn contrasts the DOJ’s recent handling of whistleblower cases with the SEC and CFTC whistleblower programs, both of which had record-setting fiscal years in 2021. During FY 2021, the SEC awarded approximately $564 million to 108 individuals – both of which are fiscal year records. At the beginning of FY 2021, the CFTC set a record by issuing a $200 million whistleblower award.
While the DOJ’s payouts to whistleblowers continue to dip, the agency reiterates its public commitment to whistleblowers in the press release. “Industry insiders are uniquely positioned to expose fraud and false claims and often risk their careers to bring these schemes to light,” said Acting Assistant Attorney General Boynton. “Our efforts to protect taxpayer funds benefit from the courageous actions of these whistleblowers, and they are justly rewarded under the False Claims Act.”
The press release also touches on various types of fraud the agency encountered, like healthcare fraud including kickbacks and unnecessary medical procedures and frauds related to COVID-19. The releases notes that “[h]ealth care fraud was once again the leading source of the department’s False Claims Act settlements and judgments this past year.”