Massachusetts Recovers More Than $40 Million in 2011 Under False Claims Act
Amount Greater than Massachusetts' AG’s Annual Operating Budget for FY 11
More than $40 million was recovered under the False Claims Act by Massachusetts' Attorney General Martha Coakley’s Office in Fiscal Year 2011 (FY 11), nearly tripling the $14.4 million recovered in 2010. The total FY 11 budget for the AG’s Office was approximately $37 million.
“The False Claims Act has been a critically important tool for holding companies responsible that defraud the Commonwealth and recovering taxpayer funds,” said AG Coakley. “In today’s tough economy every dollar we can recover helps ensure that these much needed funds are not wasted. We are tremendously proud of our success last fiscal year and are working hard to duplicate those efforts in 2012.”
The following cases or investigations were brought under the False Claims Act and resulted in recoveries for the Commonwealth, its agencies and municipalities:
Source: Massachusetts' AG Office.
“The False Claims Act has been a critically important tool for holding companies responsible that defraud the Commonwealth and recovering taxpayer funds,” said AG Coakley. “In today’s tough economy every dollar we can recover helps ensure that these much needed funds are not wasted. We are tremendously proud of our success last fiscal year and are working hard to duplicate those efforts in 2012.”
The following cases or investigations were brought under the False Claims Act and resulted in recoveries for the Commonwealth, its agencies and municipalities:
- In May, the operator of three Massachusetts municipal waste incinerators agreed to pay $7.5 million to resolve allegations that it committed multiple violations of the Hazardous Waste Management Act, the Clean Water Act and the Wetlands Protection Act. A majority of the funds were directed to the recovery efforts of individual municipalities.
- A case against investment bank Morgan Stanley, involving the bank’s securitization of subprime mortgage loans, resulted in the recovery of over $23 million for the state pension fund, as well as more than $10 million in False Claims Act payments to the Commonwealth’s general fund.
- In August 2010, CVS paid $2.65 million to the Commonwealth and to over 200 cities and towns in Massachusetts after an investigation revealed that the company was overcharging public entities for various prescription drugs under the compensation insurance system.
- In November 2010, the United States Fidelity and Guaranty Company (“USF&G”) forfeited nearly $2.9 million of claims for payment from the Massachusetts Department of Transportation after an investigation of false claims by the AG’s Office.
- In January, the URS Corporation paid an additional $2.3 million to resolve allegations that it submitted false and inflated invoices to the Massachusetts Port Authority during the renovation of Logan International Airport.
- In February, the AG’s Office filed a lawsuit against XL Specialty Insurance (XL) for failing to compensate the Commonwealth more than $3 million after a bridge in Grafton collapsed due to shoddy construction work. XL allegedly submitted false statements to avoid their obligations of a contract and performance bond with the Massachusetts Department of Transportation (MassDOT) in June 2007.
Source: Massachusetts' AG Office.
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