Government goes after corporate fraudsters

Record Penalties for Fraud, Few Charges for Executives

By MICHAEL S. SCHMIDT and EDWARD WYATT, NYT

WASHINGTON — Pharmaceutical companies, military contractors, banks and other corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government, analysts say — a record sum and more than twice the amount assessed last year by the Justice Department.

The surge in penalties is because of a number of factors, including the resolution of longstanding actions against drug makers and military contractors, as well as lawsuits brought against mortgage lenders after the financial crisis. But it also reflects a renewed emphasis on corporate fraud, as the Justice Department devotes more resources to the issue and demands higher penalties from companies.

“We are putting more resources into these cases and better using the resources we have,” said Tony West, the acting associate attorney general.

The ballooning settlements are for civil charges of fraud against the government, criminal charges often related to the same conduct and, in the case of health care companies, recovery of money for states for Medicare fraud.

(More here.)