On February 1, the U.S. Department of Justice (DOJ) released its False Claims Act (FCA) statistics for the 2021 fiscal year. According to the DOJ, in fiscal year 2021, the government paid out $237 million to whistleblowers who exposed fraud and false claims by filing qui tam lawsuits. This is the lowest total paid out to False Claims Act whistleblowers in a single year since 2008.
“The newly released statistics reflect a troubling trend in recent years,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “The DOJ has begun to treat whistleblowers like second-class citizens. It routinely throws out strong whistleblower cases without just cause. While the SEC and CFTC are making great strides forward with their whistleblower programs, the Justice Department is in reverse.”
Under the False Claim Act’s reward provision, if a whistleblower’s original information results in a sanction against a fraudster, they are entitled to a minimum payment of 15% and a maximum payment of 30% of the proceeds collected by the government. The law’s qui tam provisions allow whistleblowers to file suits against fraudsters on behalf of the government.
In the 2014 fiscal year, the DOJ set a record by paying out $715 million to whistleblowers. That year, the DOJ recovered over $4.4 billion from whistleblower-initiated cases. Since then, the amount paid out to whistleblowers has been in decline. The agency has not paid out over $500 million to whistleblowers in a fiscal year since 2017.
In contrast, the SEC set a record in fiscal year 2021, paying out $560 million in whistleblower awards. The CFTC likewise set records in the fiscal year 2021, issuing a $200 million award.
Despite the decline in qui tam payouts, the DOJ remains publicly committed to whistleblowers. “Industry insiders are uniquely positioned to expose fraud and false claims and often risk their careers to bring these schemes to light,” said Acting Assistant Attorney General Boynton in the DOJ press release. “Our efforts to protect taxpayer funds benefit from the courageous actions of these whistleblowers, and they are justly rewarded under the False Claims Act.”
The DOJ reports that there were 598 qui tam suits filed in the 2021 fiscal year – an average of over 11 new cases every week. It further reports that over $1.6 billion in settlements and judgments arose from lawsuits filed under the qui tam provisions of the False Claims Act.