Removing Justice Department from Qui Tam Affairs Could Improve Enforcement Measures

Perhaps the most effective and least emotional way to cover government budget deficits is not to collect more taxes, but rather to collect more damages from massive fraud by government contractors. Could it be that the conflicts within the Department of Justice (DOJ) and local prosecutors nationwide in the United States Attorney’s Offices (AUSA) have been far too lenient over the years despite the False Claims Act ( FCA)? There is more money to be had and in doing so could serve as a deterrent against fraud and waste.

The FCA has been an effective weapon in the fight against fraud. President Lincoln signed the FCA Act on March 2, 1863. Also known as “Lincoln’s Law,” the original FCA prohibited various acts aimed at fraudulently obtaining government money. Congress initially adopted the FCA with the intention of combating fraud against the Union Army during the Civil War. While the legislative history of the Act focuses on fraud by military contractors, it applies to all types of fraud committed by anyone doing business with the government.

I spoke with Joel Androphy, Berg and Androphy from FCA and ways to improve it. “The law is obviously well-intentioned and it worked, but it was more of a cost to doing business than the deterrent it was meant to be,” Androphy told me. The FCA now covers a wide range of businesses that have signed contracts directly with or receive money through government funds. Besides military fraud, fraud involving Medicare, Medicaid has been one of the biggest areas of application. Far from having large government agencies leading the charge, individuals have been the cornerstone of these types of enforcement actions by becoming whistleblowers, informing the government of inside information not just to right the wrong. of the company, but also to share the reward of a fine. or penalty. These types of whistleblower lawsuits, known as “qui tam,” provide a clawback for the government while sharing a percentage of that clawback with the individual talking about the business. While the targeted companies would be expected to have a negative or hostile opinion of the individual who exposed their corrupt secrets, the government agents who take charge of the business are not expected to be share the same opinion. Androphy told me that is exactly what happened.

In the biggest whistleblower case in history, the U.S. government actually jailed top whistleblower Bradley Birkenfeld in what became the biggest Internal Revenue whistleblower case ever … Birkenfeld worked for UBS and its testimony and cooperation have returned billions of dollars to the US Treasury. The results of this survey have borne fruit not only in recovered dollars, but also thanks to the dissuasive effect which has repercussions on the 1% of the best American employees.

Despite the enormous repayment potential of our treasury and providing much needed services to pay for infrastructure, police reform, and the health needs of the poor, US Senator Charles Grassley (R-Iowa) is the only voice in Congress supporting the efforts of taxpayers to recover for fraud. Beyond him is a small boutique law firm that represents whistleblowers, usually on a contingent basis, meaning the lawyers themselves pay the legal bills for a chance at a big turnaround. This can be a risky business as some of these litigation can cost millions of dollars before there is a judgment … if there is a judgment. Androphy said, “While there are some big cases that can be rewarding, the payoff is not guaranteed and is certainly paltry compared to the money the US government receives for fines and penalties.”

Some of these cases can take 3 to 5 years, often due to government delays. There is also an inherent conflict Androphy said: “As much as Senator Grassley has been a great leader in this process to support this cause, many of our politicians, backed by lobbyists, are busy on the sidelines looking for campaign contributions. . of the same entrepreneurs involved in business qui tam. Unfortunately, this is how the system is configured. Delays in the tam process are costing us billions, and the reasons for these delays may be more grim.

If a government contractor falsifies prices or fails to deliver what was promised, the whistleblower on behalf of the government will bring a confidential (under seal) action against the violator. While the general intention of Congress is to encourage more private prosecutions, the government feared that the FCA’s actions, if not sealed, could prevent the defendants from possible criminal investigations. This retaliation and the likely prospect of a lost career are the main motivating factor in encouraging someone to move forward.

Congress estimated that an initial period of 60 days would be sufficient for the government to make decisions with the prospect of some extensions in limited circumstances. Today, the DOJ is just shuffling the documents for the 60-day period, fully hoping the courts will give it years to pull itself together and investigate properly. Despite these inefficiencies, billions of dollars channeled fraudulently have been clawed back by the US government.

There are excellent DOJ attorneys in Washington, and U.S. assistant lawyers across the country, but strife surrounds it as well. The same government prosecutors will likely one day quit their posts and turn to a private, established law firm that represents those same fraud-torn industries. This conflict alone should make us think that the system needs to be improved.

Androphy said he too often hears the same excuses as to why his cases aren’t moving so fast; (1) we should not collect more money for fear of harming the government agency relationship with the fraudulent company. Let us punish them some, but let us keep them in business since they provide services, even dishonest ones; (2) the victim support organization approved the payment knowing that the service was not provided; (3) there may have been a misunderstanding or confusion leading to overcharging or cheating; (4) those at fault will force us to be judged and we risk losing, risking our advancement or our career; or (5) we do not want to take legal action and will close the best and fastest deal.

If the DOJ simply followed the law and behaved ethically and responsibly, several billions more could be clawed back each year and enough to provide a solid down payment to President Biden’s agenda to rebuild the United States, both morally and structurally.

Over the past 10 years, the DOJ has raised an average of $ 2.9 billion annually from corporations for a total amount of nearly $ 29 billion. I asked Androphy if he thought it was a lot of money, “I would estimate the US is cheated at least 7 times that amount for not recovering all of the actual damages, tripling that amount. and penalties. That’s an additional $ 20 billion – $ 30 billion each year that would go a long way to put money into the Consolidated Revenue Fund while deterring fraud, no more waste.

One solution offered by Androphy to correct the process is a suggestion that Congress reorganize the FCA to allow private attorneys to work with local U.S. prosecutors’ offices to independently conduct all cases and investigations, leaving the Department of Justice in a role. monitoring / status. “This,” Androphy said, “would help with case development while keeping the government in the loop, as it collects an average of 75 to 85% of any recovery.”

No more money in American coffers.


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