Attorney General Says Results Total More Than Her Office’s Annual Operating Budget for Fiscal Year 2011
The Attorney General’s Office announced that it has recovered more than $40,000,000 dollars in conjunction with cases and investigations it has conducted concerning the False Claims Act. It says the amount is nearly triple the $14,400,000 recovered in 2010. This amount is also greater than the office’s actual operating budget for Fiscal Year 2011 which was approximately $37,000,000 dollars.
“The False Claims Act has been a critically important tool for holding companies responsible that defraud the Commonwealth and recovering taxpayer funds,” announced Attorney General 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 False Claim Act, which was passed in 2000, authorizes the Attorney General “…to sue entities that submit false claims for payment to the state government or its political subdivisions on contracting and purchasing issues.” These claims are handled by the Public Protection and Advocacy Bureau of the Attorney General’s office.
The following is a highlight of cases or investigations resulting in monetary recovery under the False Claims Act for 2011:
- 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 sub-prime mortgage loans, resulted in the recovery of over $23,000,000 for the state pension fund, as well as more than $10,000,000 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 2012, the Attorney General is involved with two other matters involving the False Claims Act:
- 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.