Justice boasts record year for fighting fraud in federal programs

Using investigations and lawsuits, the Justice Department helped the government recover $2.1 billion in fraudulent payments in fiscal 2003, a 75 percent increase over the amount retrieved the previous year.

More than 80 percent of the money collected, or $1.7 billion, resulted from discoveries of health care fraud, the Justice Department announced Monday. For example, the Health and Human Services Department retrieved $641 million through a settlement with HCA Inc., a hospital supply company accused of overbilling the Medicare program.

The Office of Personnel Management's Federal Employees Health Benefits Program and the Defense Department's Tricare insurance program for military service members benefited from health care-related fraud recoveries as well.

Justice lawyers also collected substantial amounts through Defense Department procurement fraud cases. Settlements with contractor Northrop Grumman Corp. accounted for $191 million of $299 million in total Defense procurement recoveries. The Los Angeles-based contractor allegedly sold the Navy defective military equipment. Roughly $60 million of the settlement fees resulted from a case against Newport News Shipbuilding Inc., a company Northrop Grumman purchased in fall 2001.

Peter Keisler, assistant attorney general at the Justice Department's Civil Division, said the record level of recoveries in fiscal 2003 "attests to the contributions of whistleblowers who report fraud and the extraordinary and tireless efforts of civil servants."

Amendments to the 1863 False Claims Act introduced by Sen. Charles Grassley, R-Iowa, and Rep. Howard Berman, D-Calif., in 1986 aided fraud recovery significantly, Keisler said. The amended law grants people unearthing fraud the right to sue alleged perpetrators on the government's behalf. If the government chooses to help with such cases, the whistleblower is eligible to receive 15 percent to 25 percent of any resulting settlement. Otherwise the whistleblower can receive up to 30 percent of any settlement.

Since 1986, when Congress passed the False Claims Act amendments, the government has retrieved $12 billion lost through fraud.