Falsifying Government Claims and Insider Trading

Nearly 10 percent of the annual U.S. budget, by some estimates, finds its way into the hands of individuals and companies through fraud. In 2010 alone, the U.S. government recovered more than $3.1 billion from organizations and individuals that prosecutors say had filed false claims for services or products.

A published report says 80 percent of the fraud is in the health-care sector for billings made to Medicare and Medicaid, although defense, education, transportation, and oil and gas are also targets.

Tough economic times have exacerbated the situation and the federal government has stepped up investigations and enforcement actions, including pursuit of insider trading, wiretapping and data-mining.

This article by KPMG LLP Partners Richard Girgenti and Timothy Hedley  discusses various approaches to this major issue, including the impact of numerous federal laws and programs – both stimulus and recovery.

They include the False Claims Act of 1863, the American Recovery and Reinvestment Act of 2009, the Improper Payments Elimination and Recovery Act of 2010, The Troubled Asset Relief Program of 2008, and the U.S. Fraud Enforcement and Recovery Act of 2009.

The article is reprinted with permission from Fraud Magazine.