Recently, the U.S. Department of Justice’s (DOJ) new fraud division issued guidance to prosecutors outlining its priority areas for enforcement. This guidance underscores that the federal government is serious about criminally prosecuting fraudsters who cheat taxpayer-funded government programs. While the guidance is focused on criminal enforcement, the DOJ’s priority areas outlined in the guidance memo cover areas that also have substantial overlap with enforcement under the False Claims Act (FCA), one of the government’s most powerful tools to combat fraud.

The False Claims Act

The False Claims Act is one of the federal government’s most powerful tools for combatting fraud in many shapes and forms. Critical to the FCA are whistleblowers who help uncover fraud and can be a wide range of people, from an insider at a company committing fraud, to a vendor or marketer enticed by an offending party to participate in fraud.

Fraud Enforcement

Earlier this year, the DOJ launched the Fraud Division to ramp up its enforcement efforts against fraud directed at government programs. This effort was in response to a Government Accountability Office estimate that fraud costs the government between $233 billion to $521 billion annually.

Then in August, Assistant Attorney General Colin M. McDonald issued a memo outlining the Fraud Division’s plans and priority areas. The division’s plans included increasing headcount to approximately five hundred attorneys and staff while continuing rapid growth for two years beyond that. Since then, more than 90 U.S. attorney offices throughout the country have assigned a prosecutor to the division.

Already, the National Fraud Enforcement Division has brought many successful suits, including one case involving a Texas laboratory, its former CEO, and a Florida businessman reaching $36.4 million settlement with the government in a kickback and unnecessary genetic testing scheme.

The memo also outlined the Division’s priority areas for enforcement. Reflecting the many different types of fraud, the Division’s named priorities included two important areas, 1. government procurement, including defective pricing, bid rigging, self-dealing, bribery, product substitution, and billing frauds, and 2. health care fraud, including kickbacks, illegal prescribing and dispensing of opioids, or improper billing to government programs such as Medicare or Medicaid for reimbursement.

Government Procurement Fraud

Government procurement fraud occurs when contractors or vendors of government agencies engage in deception during bidding, negotiation, or execution of a contract to illegally obtain government payment. One of the most common types of government procurement fraud is small business fraud. The Small Business Administration (SBA) offers several programs to steer federal contracting dollars to small businesses that meet certain criteria. These programs include Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), the 8(a) program for socially and economically disadvantaged people, Women-Owned Small Businesses (WOSBs), and more. Small business fraud occurs when beneficiaries misrepresent their eligibility for these SBA programs, thereby preventing funds from going to their rightful place.

Government procurement fraud can also take the form of bid rigging and price fixing, in which contractors collude to inflate bids, suppress discounts, or establish minimum prices. As a result, the government and taxpayers may pay more than they would in a competitive bidding process, while honest contractors lose opportunities to compete fairly for government contracts.

Health Care Fraud

Health care fraud takes place when fraudsters improperly bill government health care programs such as Medicare and Medicaid. Not only is health care fraud a drain on taxpayers, it also can put patients’ health at risk.

Health care fraud can take many forms. One of the most common types of healthcare fraud are kickbacks, where people or companies provide anything of value, including things like cash, free services, and certain types of discounts, to induce or reward the referral of business reimbursable by federal healthcare programs. Other types of health care fraud include providers who commit fraud by billing for medically unnecessary treatments, flouting rules on the objective diagnostic criteria for certain treatments, or outright altering medical records to justify the provision of medical treatment. Another common health care fraud scheme is upcoding, where providers submit the wrong codes with their claims for reimbursement, seeking a higher amount than they are entitled.

The Critical Role of Whistleblowers in Exposing Fraud Against the Federal Government

Whistleblowers play a critical role in exposing fraud against the federal government, often bringing to light misconduct that might otherwise go undetected. By coming forward and reporting suspected wrongdoing, whistleblowers help hold fraudsters accountable, promote fair competition, and ensure taxpayer dollars are used as intended. Anyone who suspects government fraud should consider speaking to a whistleblower attorney to understand your legal options, learn about potential protections against retaliation, and determine the best way to report the misconduct. An experienced whistleblower attorney can help navigate the reporting process and understand whether you may be eligible for a financial reward under the False Claims Act. Whether government procurement or health care fraud, Baron & Budd has decades of combined experience in litigating these types of cases on behalf of whistleblowers.

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.