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
Monthly Archives: April 2019
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
We hope this blog serves as a forum for spirited debate, challenge, and comment. The attorneys in our White Collar Crime and Government Investigations practice group have a wide array of diverse experiences that we hope to share with you here. While we are white-collar defense lawyers, many among us are former federal and state prosecutors, and we appreciate the demands of justice even as we provide our clients a vigorous legal defense. … More
Lessons from a Recent (and Rare) DOJ FCA Lawsuit Against a Private Equity Firm and Its Portfolio Pharmacy Company
Recently, a Florida federal judge dismissed the Department of Justice’s (DOJ) False Claims Act (FCA) allegations against a compounding drug pharmacy and the pharmacy’s private equity (PE) owner. For two reasons, the case may be illustrative of the DOJ’s increasingly aggressive pursuit of what it perceives as fraud within the healthcare industry.
First, it is noteworthy that DOJ suffered a dismissal of its FCA claims. … More
The Second Circuit recently decided a pair of insider trading cases that provide additional guidance on the law following the court’s 2017 decision in Martoma. In United States v. Klein, 2019 U.S. App. LEXIS 858 (2d Cir. Jan. 10, 2019), the Second Circuit upheld Defendant Schulman’s insider trading conviction. Schulman, the “tipper,” did not directly trade on material, non-public information, but rather shared it with Klein,… More
First Circuit Reaffirms FCA Retaliation Claims Are Not Subject to FRCP 9(b): Where There’s Smoke, There Could Be Fire
The First Circuit recently revisited the pleading standard for retaliation claims under the False Claims Act, and reiterated its prior position that such claims are not subject to the same heightened pleading standard as direct FCA violation claims.
In Guilfoile v. Shields, 913 F.3d 178 (1st Cir. 2019), a former president for a group of healthcare entities that provided specialty pharmacy services to hospitals alleged the entities offered illegal “referral fees” to a consulting group to induce hospitals to award the entities contracts. … More
On January 28, 2019, the Department of Justice announced that a 13-count indictment against Chinese telecommunications conglomerate Huawei Technologies Co. Ltd. and various affiliated parties was unsealed earlier that day. Huawei is charged with bank fraud, wire fraud, violations of the International Emergency Economic Powers Act, obstruction of justice, and various related conspiracy charges.
All charges in the indictment stem from Huawei’s alleged long-standing ploy to deceive financial institutions and the U.S.… More
To Avoid Expensive Trouble with Regulators, Banks Should Invest in a BSA Officer with Substantial Authority and Staff Support
While it is often said that “you have to spend money to make money,” it is less often said, but equally true, that you have to spend money to avoid spending a whole lot more money later. For a bank, investing in a strong Bank Secrecy Act (“BSA”) Officer with an ample anti-money laundering (“AML”) compliance staff could help avoid significant expense down the road.
The BSA,… More
The Department of Justice (DOJ) announced recently that it reached a $63.5 million settlement with pathology lab Inform Diagnostics related to allegations of False Claims Act (FCA) and Stark Law violations. The government alleged that the company had illegally provided referral-source doctors with subsidies for electronic health records (EHR) systems and free or discounted technology consulting services. The case, which developed out of a whistleblower complaint, was prosecuted as a civil matter with the coordination multiple DOJ offices,… More