Not legal advice; educational only. Cases are described according to their public posture and resolve allegations without an admission of liability unless a court found otherwise.
There is one skill at the center of this entire section: turning public government data into a defensible fraud signal. It is worth real money pointed in either of two directions, and most people only ever see one of them.
Point it at a company defrauding the government, and you have the makings of a whistleblower (qui tam) case under the False Claims Act, where a private citizen, the relator, sues on the government’s behalf and shares 15 to 30% of the recovery. Point the same screen at a company a client is about to buy, and you have due diligence, because under the Act’s successor-liability rules, an acquirer can inherit a target’s pre-closing fraud, and a whistleblower suit can sit under seal, legally invisible, straight through a clean-looking diligence process.
The story draws; the diligence converts. This field guide is the map to both.
Why this, why now
Two facts make 2026 the moment to understand this. First, the money is at a record: in fiscal year 2025 the Justice Department recovered more than \$6.8 billion under the False Claims Act, the most in the law’s history, with whistleblowers behind the overwhelming majority of it.
| FY2025 False Claims Act | Figure |
|---|---|
| Total recoveries | >\$6.8 billion (record) |
| Health-care-related | >\$5.7 billion |
| Qui tam suits filed | 1,297 (record) |
| Recoveries from qui tam suits | >\$5.3 billion |
| Relator awards paid | ~\$330 million |
Second, on April 30, 2026 the Justice Department’s Civil Division launched its FOCUS initiative, a formal invitation to “data miners,” outside analysts who detect fraud from public data rather than insider knowledge. The government is, in plain terms, recruiting exactly the skill set in a forensic due-diligence lab.
But the honest thesis runs through everything below, and it is the ACFE‘s professional-skepticism standard restated: public data is a lead-generation engine, not a case. An outlier is a question, not an answer. The barrier to finding government fraud has collapsed; the barrier to proving it has not moved. That tension is the whole subject.
The offense: how outsiders win whistleblower cases
Start here if you want to understand who has actually done this and how the machinery works.
- Catching Fraud With Public Data, the people and firms who turned public Medicare and SBA data into multimillion-dollar recoveries (Lincoln Analytics, Sidesolve, the nationwide cardiac-device case, the Integra arc), and the honest limits of what data alone proves.
- Build a Medicare Outlier Screen, Step by Step, the actual code: a peer-relative billing-outlier screen on free public CMS data, in about a hundred lines of Python, with the discipline to clear a lead as rigorously as you raise one.
- The Whole Life Cycle of a Qui Tam Case, what happens between finding the lead and getting paid: the sealed complaint, the years-long government investigation, the intervention decision, and the relator’s share.
- Why Data Alone Usually Loses, the legal reality-check: Rule 9(b), the public-disclosure bar, and the “obvious alternative explanation” doctrine that dismisses pure-statistics cases, and what the survivors did differently.
The defense: how not to inherit someone else’s fraud
Start here if you are buying, lending to, or investing in a company that gets paid by the government.
- Don’t Inherit the Fraud, False Claims Act exposure as an M&A deal-killer: successor liability, the sealed-case blind spot a standard diligence process misses, and how treble damages plus per-claim penalties turn a predecessor’s billing into the buyer’s problem.
Where to start, depending on who you are
| If you are… | Read, in this order |
|---|---|
| An analyst or fraud examiner curious whether you could do this | Catching Fraud → Build the Screen → The Life Cycle → Why Data Alone Loses |
| A lawyer or compliance professional | Why Data Alone Loses → The Life Cycle → Catching Fraud |
| A buyer, lender, or investor underwriting a government-paid target | Don’t Inherit the Fraud → Catching Fraud → Build the Screen |
| A seller preparing for diligence | Don’t Inherit the Fraud → Why Data Alone Loses |
The through-line
Across every piece in this section, the same discipline holds. The ACFE Report to the Nations finds that tips, not analytics, catch the most occupational fraud, roughly three times as often as the next method. The data does not replace the human judgment; it aims it. The screen finds the question. The forensic work, building a particularized, knowingly-false-claim case that excludes the lawful explanation, answers it. And whether you are bringing the case or defending against inheriting one, that last mile is where a CPA and Certified Fraud Examiner earns the engagement.
By Noah Green CPA CFE, for Sheepdog Prosperity Partners. Sheepdog Prosperity Partners provides financial due diligence and analytics-enabled transaction support. Educational only; not legal advice.
Primary sources: DOJ, The False Claims Act · DOJ, FY2025 recoveries exceed \$6.8B · DOJ, FOCUS initiative (2026) · 31 U.S.C. § 3730 · ACFE, Report to the Nations