As we anticipated last spring, the Department of Justice (DOJ) has signaled that it will utilize civil enforcement of the False Claims Act (FCA) to address new and emerging cybersecurity threats. On October 6, 2021, Deputy Attorney General Lisa Monaco announced the launch of a new cyber-fraud initiative led by the Fraud Section of DOJ’s Commercial Litigation Branch. The new initiative will focus FCA enforcement against federal government contractors or grant recipients who fail to follow required cybersecurity standards.… More
Tag Archives: FCA
Federal prosecutors continued to quickly respond to PPP loan fraud, bringing two additional cases that allege clear misuse of the funds intended for small businesses. In one case, prosecutors in Georgia charged reality TV personality Maurice Fayne, aka “Arkansas Mo” of “Love & Hip Hop: Atlanta” fame, with bank fraud for allegedly using $1.5 million of a $2 million PPP loan to maintain his luxury lifestyle. … More
On Tuesday, May 5, the Department of Justice (DOJ) filed charges in the federal District Court of Rhode Island against David A. Staveley and David Butziger for conspiracy to make a false statement and conspiracy to commit bank fraud in connection with loan applications made under the federal government’s Payroll Protection Program (PPP). The Complaint alleges that Staveley of Andover, Massachusetts, and Butziger of Warwick, Rhode Island,… More
Editors’ Note: This is the fourth in our start-of-year series examining important trends in white collar law and investigations in the coming year. Our previous entry discussed anti-corruption trends in 2020. Up next: a look at State Attorney General trends. Look for additional posts throughout the month of January.
More than halfway into the Donald Trump administration,… More
Thanks to inexact language in a settlement agreement, a for-profit hospital chain can challenge whistleblowers’ eligibility for attorneys’ fees under the False Claims Act (“FCA”). The single sentence that spawned nearly 5 years of litigation was: “All Parties agree that nothing in this Paragraph or this Agreement shall be construed in any way to release, waive or otherwise affect the ability of CHS to challenge or object to [whistleblower’s] claims for attorneys’ fees,… 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
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
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
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