On December 4, the Justice Department announced a record-breaking recovery of $4.9 billion in settlements and judgments in civil cases brought under the False Claims Act (FCA) for the fiscal year ending September 20, 2012. This year’s recovery eclipses the prior record by more than $1.7 billion. The last fiscal year’s recovery comprises more than a third of the total recoveries of $24.2 billion since the Act was amended in 1986.

Included in the total was $3 billion in recoveries for health care fraud and $1.4 billion for mortgage and housing fraud. This was the second straight year in which the Justice Department set a new record for FCA recoveries for health care fraud, with two of the three top settlements this year coming from pharmaceutical and medical device companies.

Of significance, $3.3 billion of the nearly $5 billion recovery resulted from whistleblower actions, according to the Justice Department. In fact, the Justice Department noted the increased incentives for whistleblowers under the various amendments to the FCA resulted in an unprecedented number of investigations and recoveries by whistleblower suits. Principal Deputy Assistant Attorney General Stuart F. Delery said, “The whistleblowers who bring wrongdoing to the government’s attention are instrumental in preserving the integrity of government programs and protecting taxpayers from the costs of fraud,” and noted that the Justice Department is “extremely grateful for the sacrifices they make to do the right thing.”

Notably, although the number of qui tam suits filed in the last fiscal year increased to a record-breaking high, the Justice Department has not increased its intervention in whistleblower suits; it continues to intervene at the same level as previous years.

Bottom-Line: whistelblowers continue to be active in bringing allegations of FCA violations to the Department of Justice and other agencies, and the federal government can be expected, in turn, to continue to heavily rely on their reports with ever-increasing success.  This, of course, requires employers to broadly step-up their compliance programs.