A New Report Suggests the Federal Government Loses Up To Half a Trillion Dollars to Fraud. Here’s How Whistleblowers Can Help.

April 19, 2024

According to a recently released government study, the federal government loses an estimated $233 to $521 billion each year to fraud. To put that in perspective, in 2023, the higher end of that range is more than the federal government spends on veterans’ benefits, transportation, agriculture, housing, and a host of other essential government functions. It is more than the budgets of the Departments of Transportation, Homeland Security, Energy, Labor, and Justice combined.

While the government has many tools to fight fraud, the Department of Justice (DOJ) has touted the federal False Claims Act (FCA) as “one of our most important tools for rooting out fraud, ensuring that public funds are spent properly, and safeguarding critical government programs.” Under the FCA, whistleblowers, through an attorney, can report fraud against the government, stopping unlawful conduct and potentially receiving rewards of between 15 and 30% of the recovered amount.

Fraud against the government takes many forms. One of the biggest is Medicare fraud. In 2023, for example, one large health insurer paid $172 million to settle allegations that it defrauded the Medicare Advantage system.

While healthcare fraud is generally the largest source of FCA recoveries, it is by no means the only one. In recent years, the DOJ has resolved cases alleging fraud related to bid rigging, unnecessary military spending, cost accounting, covid-relief, and more.

Even with the False Claims Act’s tremendous success, it still only addresses less than 2% of annual fraud against the government. Whistleblowers who report fraud are one piece of the multi-pronged approach necessary to stopping this potentially half-a-trillion-dollar hole in the federal budget.

If you are concerned about fraud against the government, you can contact the attorneys in Outten & Golden’s Whistleblower & Retaliation Practice Group to learn more about your potential options.

(*Prior results do not guarantee a similar outcome.)