On September 18, 2019, the Department of Justice announced a $21.36 million settlement to resolve a False Claims Act (“FCA”) lawsuit alleging a fraudulent kickback scheme through which a pharmaceutical company (Patient Care America, or “PCA”) induced doctors to write expensive and unnecessary prescriptions to military veterans. A False Claims Act settlement of this magnitude is not unusual, particularly in the healthcare industry (which accounted for $2.5 billion of the DOJ’s $2.8 billion in FCA settlements and judgments in 2018).… More

A bipartisan group of Senators, with the support of the American Bankers Association, recently introduced bill S.2563, known as the ILLICIT Cash Act.  The acronym “ILLICIT” stands for “Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings.”  As that name suggests, the bill’s primary purposes are to close loopholes involving shell companies, improve information collection, and encourage communication between financial institutions and law enforcement. … More

The U.S. Department of Justice (DOJ) continues to actively target the healthcare industry for False Claims Act (FCA) and other alleged violations, and it took significant steps to further its reach into the telehealth and genetic testing markets this week.  Prosecutors in the Southern District of Florida (SDFL) indicted the CEO of a genetic testing company in an alleged referral-source kickback scheme in which, according to the indictment,… More

Please see our follow-up concerning the DOJ’s October 8, 2019 guidance.

On September 12, 2019, Deputy Assistant Attorney General Matthew Miner signaled that the Department of Justice may provide further guidance to prosecutors—and companies—on how to evaluate claims of corporate poverty.  In a speech at the University of Texas School of Law’s 6th Annual Government Enforcement Institute,  Miner stated that the DOJ has been considering the issuance of “concrete guidance or factors to consider” to assist prosecutors in their evaluation of companies who claim that they are unable to pay DOJ-assessed fines and penalties for their misconduct. … More

The Eleventh Circuit agreed with the trial court that the government must do more than present expert evidence that a physician’s clinical judgment was inaccurate to establish falsity under the False Claims Act.  Nonetheless, the appellate court remanded for the trial court to consider additional evidence that, the government contends, establish falsity even under the standard now set by the Eleventh Circuit.

At issue was whether AseraCare Inc.… More

The Massachusetts Superior Court recently held that a qui tam relator’s analysis of publicly available information was subject to the public disclosure bar and that, no matter how involved or expert that analysis was, the relator was not the original source of the information alleged in the complaint.  Thus, in Commonwealth ex rel. Johan Rosenberg v. JPMorgan Chase & Co., et al., SUCV2014-03323, Judge Kaplan,… More

Last week the Department of Justice announced that American Airlines will pay over $22 million to settle claims that it falsely reported delivery times for mail it delivered on behalf of the United States Postal Service.

Under a contract between USPS and American, the airline was responsible for picking up U.S. mail from various receptacles in the United States and in U.S. government offices abroad,… More

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

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 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