Recently, Assistant Attorney General Colin M. McDonald issued an internal memo to all DOJ fraud division personnel previewing the rest of the year as Washington ramps up its emphasis on enforcing fraud. According to the memo, the Government Accountability Office estimated that the federal government loses between $233 billion to $521 billion annually to fraud. This fraud affects many sectors, including health care, defense, technology, tax, and trade. The memo outlines the newly organized National Fraud Enforcement Division’s ramp up in personnel and resources to combat fraud in its many forms.

Behind the Increased Enforcement Efforts

Earlier this year, the DOJ launched the National Fraud Enforcement Division, which has already successfully prosecuted crimes representing billions of dollars in fraud. The Department expects to increase headcount to approximately five hundred attorneys and staff while continuing rapid growth for the next two years. New hires will be asset recovery attorneys and investigators, corporate enforcement experts, experts in data science, and more. Altogether, this signals a DOJ that is shoring up its capabilities to claw back funds from fraudsters.

Priority Areas of Enforcement

As McDonald states, resources will be dedicated to those types of frauds that threaten the health, safety, and security of Americans the most. The following are the key areas the Fraud Division attorneys will prioritize:

Public Trust and Financial Integrity

Given the U.S. economy is the largest in the world, government procurement fraud is a lucrative area for fraudsters. These take the form of contracting fraud schemes, including defective pricing, bid rigging, self-dealing, bribery, product substitution, and billing frauds. Altogether, these forms of fraud reduce the quality of services provided to taxpayers and, in many cases, threaten national security. In addition, this fraud may also cover benefit and grant programs – such as student loans, childcare, veteran’s benefits, nutritional supplements, and disaster relief to small business programs. Fraud in these cases can reduce families’ access to critical services and creates financial burden.

Health Care

The rising cost of health care is exacerbated by rampant fraud on government and private insurers. Estimates say that 3-10% of the nearly $7 trillion spent on health care is lost to fraud. This fraud can take the form of home health aide and hospice scams, kickbacks, illegal prescribing and dispensing of opioids and other controlled substances, and more. After committing such crimes, fraudsters then often bill government programs such as Medicare or Medicaid for reimbursement. Healthcare fraud not only siphons government funds from their rightful place, but it can also put patients’ lives at risk.

Internal Revenue

The government trusts Americans to voluntarily comply with tax obligations. However, not all do. Some return preparers include false claims on tax returns and charge higher fees to do so. Others conceal income or falsify information on their returns. Thus, in lying to the IRS, they cheat the federal government out of revenue meant to fund the country.

 Global Trade and Commerce

When corporations or individuals engage in trade fraud and customs or tariff evasion, they undermine U.S. industry and deprive the country of revenue while giving unfair advantage to foreign firms. Thus, the Fraud Division aims to target trade and customs violations and supply chains that rely on forced labor. Through the multi-agency Trade Fraud Task Force, it will prioritize transshipment schemes where high tariff countries right goods through lower tariff countries, country-of-origin fraud, the undervaluation of imported goods designed to evade duties, sanctions evasion, and foreign forced labor schemes.

Corporate Misconduct

Whether fraud or other economic crimes, the DOJ continues to prioritize prosecuting corporate misconduct for those organizations that flout the law.

The Role of Whistleblowers

As the Department of Justice continues to take a whole of government approach to combating fraud, whistleblowers become more important than ever. The False Claims Act (FCA) is one of the federal government’s most powerful tools for combatting fraud. Whistleblowers can be anyone, from an insider at a company committing fraud, to a vendor or marketer approached by an offending party to participate in fraud. Under the whistleblower provision of the FCA, whistleblowers in successful suits typically receive a reward of 15% to 30% of the amount recovered.

About Us

Baron & Budd’s whistleblower representation team has more than 50 years of combined experience representing dozens of clients in government fraud cases. They have returned more than $6 billion to federal and state agencies with whistleblower recovery shares as high as 50%.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.