The US Department of Justice (DOJ) is calling on data miners who could be potential whistleblowers to help crack down on fraud in government programs. On April 30, the DOJ announced the Fraud Oversight through Careful Use of Statistics (FOCUS) initiative, which DOJ developed to prioritize working with expert data miners who sift through publicly available government data to identify alleged fraud. Through this initiative, DOJ seeks to coordinate with potential data miner whistleblowers who have filed, or plan to file, a lawsuit under the federal False Claims Act (FCA).
The FCA allows individuals to file lawsuits on behalf of the government to help recover monies lost to fraud in government programs. In exchange for information that leads to a successful financial recovery, a whistleblower can receive a financial award, usually between 15 and 30 percent of any money collected.
“[T]he 342 million American citizens play an important role in amplifying the Department’s resources and helping to identify potential fraud that might otherwise go undetected,” DOJ observed in its press release announcing the FOCUS Initiative.
The FOCUS Initiative follows DOJ’s recent launch of the National Fraud Enforcement Division (NFED), charged with investigating and prosecuting those who engage in fraud related to federal programs. DOJ created NFED in response to reports of widespread fraud in tax-funded programs. DOJ intends the FOCUS initiative to help DOJ’s Civil Division support NFED’s work to fight fraud, with priority given to information from sophisticated data miner whistleblowers.
In recent years, the number of False Claims Act cases filed by data miner whistleblowers has grown significantly, as has the overall number of False Claims Act cases filed. Since fiscal year 2024, more than 45% of all whistleblower complaints filed have come from data miners, according to DOJ. One purpose of the new FOCUS initiative is to help DOJ identify those data miners who have shown “an insightful application of sophisticated technological capabilities to regulatory frameworks to help identify potential fraud that would otherwise go undetected.” By doing so, DOJ seeks to prioritize working with those data miners who it believes are more likely to be successful.
In addition to explaining its priorities, DOJ’s guidance on the FOCUS initiative also offers potential whistleblowers and their counsel guidance on what type of information DOJ values. According to DOJ:
- The most successful whistleblowers have identified a clear and material violation of a statutory obligation using high-quality, reliable, and predictive data, and can provide DOJ with a clear investigative road map of the facts, witnesses to interview, and evidence to obtain.
- Data miners should be aware of the pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure that applies to False Claims Act complaints, including the obligation to state with particularity the circumstances of the fraud.
- The best data miners will consider alternative non-fraudulent explanations for the conduct that they are seeing and be able to explain how the data, combined with other evidence, suggests scienter and falsity.
- Potential whistleblowers should understand eligibility requirements and the relevant regulatory frameworks of the government programs impacted by the alleged fraud and explain these in their complaints.
DOJ welcomes data miners to meet with the Civil Fraud Section to explain the tools they used to detect fraud, and how the analysis performed indicates that fraud has occurred.
Potential whistleblowers should be mindful of the complex regulatory statutes and eligibility requirements when filing a whistleblower lawsuit and might want to consult an attorney. Phillips & Cohen has extensive experience with False Claims Act cases that rely on data analytics, including cases involving fraud in government healthcare and defense programs.
If you know of possible violations of the False Claims Act and would like to speak to an experienced whistleblower attorney, contact Phillips & Cohen for a confidential review of your case.