Latest FCA Settlement Involving Massachusetts Lab Highlights Federal/State Cooperation

Late last month the U.S. Attorney’s Office for the District of Connecticut issued a press release regarding the latest False Claims Act (FCA) settlement involving the healthcare industry in New England.  According to the Department of Justice (DOJ), Clinical Science Laboratory, Inc. (CSL) and its individual owners agreed to pay over $1.5 million to settle claims that they had violated federal and state FCA laws.  The government stated that Massachusetts-based CSL provided urine drug testing services for substance abuse patients in Connecticut,… More

IRS Criminal Investigation Update: The “New” Voluntary Disclosure Practice

In September 2018, the Internal Revenue Service (IRS) closed its Offshore Voluntary Disclosure Program (OVDP), which had, in various forms and at various times since 2009, provided a mechanism for taxpayers with undisclosed foreign accounts to come clean and avoid criminal liability.  While this was a noteworthy development and made the news given how hard the IRS had pushed in the recent past for compliance in this area,… More

Massachusetts Regulators Placing Increased Focus on Cannabis-Related Securities Offerings

Massachusetts Secretary of State Bill Galvin and his Securities Division are increasingly turning their attention toward securities offerings in the cannabis industry, as demonstrated by the June 19, 2019 filing of the second enforcement action against a cannabis business in the last two months.  The filing was accompanied by a statement from Galvin warning of future sweeps in the industry.

The latest enforcement action, brought against Positronic Farms,… More

Supreme Court Revives False Claims Act Suit by Applying “Government Knowledge” Statute of Limitations

The Supreme Court, in a unanimous decision authored by Justice Thomas, agreed with the Eleventh Circuit that the False Claims Act’s “government knowledge” statute of limitations applies regardless of whether the government chooses to intervene in a qui tam suit.

Under the False Claims Act, a civil action must be filed by the later of 1) six years after the statutory violation, or  2) three years after the relevant facts are “known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances.”  The Act also bars all claims brought more than ten years after the violation. … More

Court Warns Government Agencies Against Directing Internal Company Investigations

The U.S. District Court for the Southern District of New York recently criticized government agencies for outsourcing their investigation to the target company, Deutsche Bank, and its counsel, Paul Weiss, to such a degree that the court treated statements that an employee made to internal investigators as the product of government interrogation.  United States v. Connolly, No. 16 Cr. 0370 (CM), 2019 U.S. Dist.… More

Trends in Securities Enforcement Discussed at BBA’s White Collar Conference

We have been writing about white-collar enforcement trends discussed at the Boston Bar Association’s recent White Collar Crime Conference (see here and here). Today we look at one area that was the subject of much discussion at the conference: securities enforcement.

Paul Levenson, Director of the Boston Regional Office of the U.S. Securities and Exchange Commission (SEC), said that the SEC is looking closely at microcap fraud,… More

Two More Pharma Companies Resolve Co-Pay Foundation Kickback Claims – Prosecutors Continue Pursuit of Similar Cases

Federal and state prosecutors recently convened at the Boston Bar Association’s White Collar Crime Conference to discuss, among other topics, health care enforcement priorities. At the conference, the U.S. Attorney’s Office for the District of Massachusetts (USAO) highlighted its recent focus on pharmaceutical companies that make donations to co-pay assistance foundations, an area where we have recently seen a flurry of False Claims Act (FCA) enforcement.… More

Minimizing Risk and Liability from Man in the Middle Attacks (or, How to Keep Your Company’s Wire Transfers from Going Awry)

Imagine this scenario:  you’ve had a productive and mutually advantageous ongoing contractual relationship of several years with another party.  You have built up quite a bit of trust over the years, and communicate regularly over email.  Your email communications include you receiving invoices and then confirming payment; your email messages might include a note about an upcoming shipment or provision of services, or even a note wishing the family well.… More

Government Attorneys Discuss Health Care Enforcement Priorities at BBA White Collar Crime Conference

Opioids, off-label marketing, and the home health industry will remain priorities for federal and state attorneys enforcing health care laws, according to comments made at the Boston Bar Association’s (BBA) White Collar Crime Conference.

The conference, held in Boston on April 22, featured speakers from the civil and criminal divisions of Boston’s U.S. Attorney’s Office and from the Massachusetts Attorney General’s Office.

Civil enforcement by the U.S.… More

Supreme Court Extends Securities Fraud Liability to Knowing Dissemination of False Statements Made By Others

Recently, in Lorenzo v. Securities and Exchange Commission, No. 17-1077, the Supreme Court held that an investment banker had committed securities fraud by copying and pasting false statements prepared by his supervisor into emails to prospective investors, even though he was not on the hook for making the statements himself.

The decision focuses on Rule 10b-5 of the Securities and Exchange Commission,… More