Government Program Fraud

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How Fraudsters Cheat Government Programs

The government operates many federal programs that distribute money to companies and contractors. This money is intended to cover costs that may include research & development, education, and defense.

These payouts amount to billions of dollars every year, and it is both difficult and expensive for the government to determine whether the funds provided were used for the intended purpose. Fraud occurs when companies or individuals submit false claims to the government in order to collect money for false purposes or for services that were never provided.

Laws exist to fight this fraud, and one of the most important among them is the False Claims Act.

How the False Claims Act is Used Against Federal Program Fraud

The False Claims Act (FCA) has been one of the most important laws against fraud for more than a century. The law is often called the Lincoln Law because Abraham Lincoln himself was the one who signed it.

It was originally intended to prevent fraud against the Union Army by the companies that were contracted to provide food, equipment, and weapons. After the civil war, it was amended several times until it reached its current strength.

Most of the “bite” of the FCA comes from its qui tam provision. This provision allows anyone who has evidence of fraud to file on the government’s behalf and claim a percentage of all funds recovered.

The FCA has a wide reach, affecting dozens of different federal programs. As a result, there are several different kinds of fraud that are covered, including all the following.

Healthcare Fraud

Fraud against the programs Medicare and Medicaid may be pursued using the FCA. Healthcare is one of the largest public expenses in the US, and as a result, it’s also one of the biggest areas for fraud. Many fraud schemes in healthcare are only detected when whistleblowers play a role in bringing the fraud to light.

Healthcare Fraud Examples

Large-scale healthcare fraud cases are tried nearly every year. In 2016, the owner of a chain of nursing facilities was found guilty of defrauding Medicare of more than $1 billion dollars. This fraud involved kickback schemes to doctors, which has been part of many healthcare fraud cases.

Defense Fraud

The defense industry, like the healthcare industry, is a massive expense for the federal government. Much of the money spent goes directly to contractors who provide the US military with everything from fighter jets to uniforms. Fraud may occur in this area when the costs of items are artificially inflated or when substandard products are provided.

Defense Fraud Examples

Defense fraud cases are common, and many legislators have focused their careers on protecting soldiers from fraud. In 2019, several executives were given fines and prison sentences for providing body armor that was a lower grade than they’d promised to deliver.

Research Fraud

Many of the most important innovations that happen in the US are discovered at top universities that are taking advantage of research grants. The government processes millions of grants every year, often with a competitive approval process. Research fraud may happen when false claims are used to get a competitive advantage.

Research Fraud Examples

Research fraud cases are somewhat rare, and they can take years to develop. However, when fraud is discovered, it can account for hundreds of millions of dollars. That was the case when Duke University was fined more than $100 million for submitting bogus data to the government to win more grants.

The whistleblower in the case was rewarded with more than $30 million of the recovered funds.

Education Fraud

Universities, colleges, and trade schools are major beneficiaries of federal dollars. Schools are primarily given funds based on their enrollment of students. This naturally includes the money that students borrow from the federal government when they choose a school. Schools may go as far as committing fraud to secure more of this money.

Educational Fraud Examples

The False Claims Act can be used against many types of kickback schemes, and most FCA cases against schools involve these types of schemes. In 2019, Oral Roberts University was charged with violating a federal ban on Incentive Compensation and fined $300,000.

Pharmaceutical Fraud

Pharmacies and drug manufacturers are an important part of the health care system, and they receive many federal dollars to provide vital services to the medical system and those covered by public programs. This amount of money can result in many different types of fraud, including false claims and kickbacks.

Pharmaceutical Fraud Examples

When pharmacy fraud cases are resolved, they can often reveal hundreds of millions of dollars in abuses. In 2019, the Walgreens chain of stores was found to have been submitting false claims. They provided special discounts to customers, but billed Medicare as if the patient had paid the full price.

Equipment Fraud

The government’s many departments require fleets of vehicles to do their work. Sometimes, such as in the case of natural disasters, they need to rapidly add new fleets and heavy equipment. This can create an opening for fraud by contractors.

Equipment Fraud Examples

Many examples of equipment fraud revolve around the work that was done to have the contractor included in the bidding war for the contract. One contractor was sentenced in 2019 for falsely misrepresenting his businesses in order to get an advantage bidding.

The Role of Whistleblower Lawyers in Government Program Fraud

Whistleblowers play a large role in bringing fraud to light and recovering money that has been stolen. Whistleblower lawyers with experience bringing qui tam lawsuits are invaluable for bringing these cases forward.

If you are aware of fraud, you should consider talking to a lawyer as soon as possible. A lawyer will be able to answer your questions, help you understand your chances and help you move your case forward.