Fiscal Year 2018 is just over halfway through and by our count the government has recovered just over $1.1 billion dollars through April 2018. This year so far is consistent with last year, which clocked in at $1.2 billion by April 2017, but lags far behind FY16, which at this point had pulled down a hefty $3.8 billion already. Careful readers may recall that the FY16 numbers are a bit skewed by the single $1.2 billion Wells Fargo settlement, which landed on April 8, 2016. Yet even without Wells Fargo, FY16 remains the undisputed leader of recent years, and the DOJ of 2018 will have to do some serious sprinting if they want to catch up to the team of two years ago.
Thus far in FY17, we have counted 117 individual recoveries: 84 from the Healthcare industry, 10 from the Defense industry, and 23 “Other” recoveries, which include settlements from a variety of fields. This distribution is generally consistent with the trends we have observed over the past few years, with Healthcare remaining DOJ’s primary target. The Other category remains the most dynamic as it continues to model DOJ’s shift away from pursuing mortgage-related defendants and towards other targets, including companies performing shipping and logistics, construction, or energy work, and even grant recipients. While these players have made appearances in the past, we believe as the subprime mortgage crisis cases continue to work their way out of the pipeline, the market share of these “other” Other industries will continue to grow.
FY 2018 above includes recoveries reported October - April
This year may not be shaping up to be a blockbuster one for DOJ in terms of dollars recovered, but that is not to say that the Department is going down without a fight. In the first half of the year DOJ already has had to “fight” for its recoveries in five different cases (meaning that five of the 117 recoveries to date have been the result of judgments from the court as opposed to settlements). This number may not seem high at first glance, but consider that in FY17 there were only threerecoveries through judgments over the course of the entire year. If this pace is kept for the latter half of this year, FY18 may very well see the highest number of judgments since LLB first began tracking this statistic. It is possible this spike is attributable to defendants emboldened by last summer’s Escobar decision deciding to roll the dice on materiality rather than settle. The motives are difficult to tease out, but at any rate this stat is one we will keep an eye on to see whether it becomes a trend, or just a fluke.