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Category Archives: Fraud, Deception and False Claims

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Fraud, Deception and False Claims

Eleventh Circuit Affirms Order for $1.195 Million in Restitution and 48 Month Sentence in Commercial Insurance Healthcare Fraud Case

Last month, the Eleventh Circuit upheld a $1.195 million restitution order and 48-month sentence against Carlos Verdeza for three counts of healthcare fraud. See United States v. Verdeza, No. 21-10461, 2023 WL 3728960 (11th Cir. 2023). Verdeza was a case brought by the United States against a physician assistant who produced fraudulent patient files and sought reimbursement from Blue Cross Blue… Continue Reading
Fraud, Deception and False Claims

U.S. Supreme Court Clarifies DOJ’s Authority to Dismiss Whistleblowers’ False Claims Act Suits, Questions Constitutionality of Qui Tam Provisions

The U.S. Supreme Court recently resolved a circuit split by holding that, in a False Claims Act action, (1) the government may seek dismissal of a qui tam case in which the government initially declined to intervene over the relator’s objection so long as it later intervened in the litigation, and (2) district courts should… Continue Reading
Fraud, Deception and False Claims

DHS Issues Final Rule Regulating Federal Contractors’ Handling of Controlled Unclassified Information

On June 21, the U.S. Department of Homeland Security issued a long-anticipated cybersecurity final rule that revises an existing clause and adds two new clauses to the Homeland Security Acquisition Regulation related to contractors’ handling of controlled unclassified information. Read on for highlights from this rule, which goes into effect July 21 and is likely… Continue Reading
Energy Enforcement, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

CFTC: Calling All Whistleblowers in Carbon Markets

With an “alert” issued June 20, the Commodity Futures Trading Commission is targeting carbon markets by asking whistleblowers to come forward with information about fraudulent or manipulative trading of carbon credits and other environmental commodities as well as related derivatives. Read on for details about the CFTC’s alert and implications for entities that trade in… Continue Reading
Fraud, Deception and False Claims, Government Contracts

Supreme Court Clarifies the False Claims Act’s Knowledge Requirement, Eliminating a Potential Defense for Government Contractors and Healthcare Providers Accused of Fraud

On June 1, 2023, the Supreme Court unanimously ruled in favor of whistleblower plaintiffs (referred to as “relators”) in consolidated False Claims Act (“FCA”) cases in a decision that clarified the application of the FCA’s knowledge requirement.  In United States ex rel. Schutte v. SuperValu Inc., the Court held that the FCA reaches defendants who… Continue Reading
Fraud, Deception and False Claims

7th Circuit Sides With Insured Party Seeking Coverage for False Claims Act Settlement

On May 3, the 7th U.S. Circuit Court of Appeals sided with the policyholder, resolving an insurance coverage dispute over a $100 million settlement related to claims under the federal Anti-Kickback Statute and the federal False Claims Act. Read on for analysis of this decision, which tries to clarify the difference between compensatory damages, which… Continue Reading
Fraud, Deception and False Claims

Ophthalmic Distributor May Face $848M in Penalties for Kickbacks, False Claims Act Violations

On Feb. 28, a federal jury in the District of Minnesota found the Cameron-Ehlen Group, d/b/a Precision Lens, and its founder and owner guilty of paying kickbacks to ophthalmic surgeons in violation of the False Claims Act and Federal Anti-Kickback Statute between 2006 and 2015. Read on for details about this case, which illustrates the… Continue Reading
Fraud, Deception and False Claims

Supreme Court to Determine Whether False Claims Act Liability Is Precluded Where Defendants Proffer an Objectively Reasonable Interpretation of an Ambiguous Legal Requirement

On January 13, 2023, the Supreme Court granted a writ of certiorari to petitioners in two False Claims Act cases to determine whether the False Claims Act’s knowledge requirement reaches defendants who can offer an “objectively reasonable” interpretation of an ambiguous legal or contractual requirement material to government payment. The Court’s decision will likely be… Continue Reading
Fraud, Deception and False Claims

Schemes that Deprive a Person of “Potentially Valuable Economic Information” – Punishable Under the Federal Wire Fraud Statute?

On Monday November 28, 2022, the U.S. Supreme Court heard oral arguments on Ciminelli v. United States. The Court will decide whether the “right-to-control” theory of fraud used by the Second Circuit is a valid basis for property fraud liability under the federal wire fraud statute. Courts and prosecutors have used the right-to-control theory to… Continue Reading
Fraud, Deception and False Claims

Pharmaceutical Manufacturer Agrees to $900 Million Dollar False Claims Act Settlement to Resolve Kickback Claims

On July 20th, on the eve of trial, Biogen Inc. agreed to pay $900 million dollars to settle claims that the company violated the False Claims Act (FCA) by allegedly paying improper consulting and speaker fees and providing lavish meals and entertainment (in violation of the Federal Anti-Kickback Statute (AKS)) to medical providers to induce… Continue Reading
Fraud, Deception and False Claims, Government Contracts

DOJ and Aerojet Settle for $9 Million in Qui Tam Cybersecurity False Claims Act Case

On July 8, 2022, the U.S. Department of Justice announced a $9 million settlement with federal government contractor Aerojet Rocketdyne, Inc. for alleged violations of the False Claims Act in a case pending in the Eastern District of California. The settlement results from alleged false statements by Aerojet related to compliance with Department of Defense… Continue Reading
Fraud, Deception and False Claims

Supreme Court Signals Interest in Clarifying Pleading Requirements in False Claims Act Suits

The U.S. Supreme Court soon will decide whether to tackle a longstanding question regarding the applicability of Federal Rule of Civil Procedure 9(b) pleading standards in False Claims Act suits. To satisfy the rule’s particularity requirement, plaintiffs generally have needed to detail specific false claims submitted by defendants. The question is whether plaintiffs instead may… Continue Reading
Fraud, Deception and False Claims

DOJ Ramps up Resources and Renews Focus on Combatting COVID-19 Related Fraud in 2022

On March 10, 2022, the U.S. Department of Justice (DOJ) announced the appointment of Associate Deputy Attorney General Kevin Chambers to serve as the Director for DOJ’s COVID-19 Fraud Enforcement Task Force. In remarks delivered at the American Bar Association’s 37th National Institute on White Collar Crime earlier this month, U.S. Attorney General Merrick Garland… Continue Reading
Fraud, Deception and False Claims

DOJ Settles First False Claims Act Enforcement Action Since Launch of Civil Cyber-Fraud Initiative

On March 8, 2022, the U.S. Department of Justice (DOJ) announced a $930,000 settlement with Comprehensive Health Services, LLC (CHS) for alleged violations of the False Claims Act (FCA). This settlement marks DOJ’s first resolution of an FCA enforcement action involving cyber fraud after launching its Civil Cyber-Fraud Initiative in October 2021, signaling DOJ’s eagerness to combat cybersecurity violations… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

First FCPA Settlement of 2022 – Enforcement on the Horizon

On February 17, 2022, the Securities and Exchange Commission (SEC) announced the first Foreign Corrupt Practices Act (FCPA) settlement of the year. Seoul-based KT Corporation (KT Corp.), South Korea’s largest telecommunications operator, will pay $6.3 million to resolve charges that it violated the FCPA by providing improper payments for the benefit of government officials in… Continue Reading
Fraud, Deception and False Claims

Elizabeth Holmes of Theranos Found Guilty of Making False Representations to Investors

Elizabeth Holmes, founder of Theranos, was convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud. The verdict follows a high-profile, fifteen-week trial in federal court in San Francisco.  Holmes was alleged to have defrauded investors, medical professionals, patients, and the public by exaggerating and making false statements about… Continue Reading
Fraud, Deception and False Claims

Another Circuit Weighs in on the Standard for Evaluating Government Motions to Dismiss False Claims Act Actions

In a recent opinion, the U.S. Court of Appeals for the Third Circuit weighed in on what standard to apply in reviewing government motions to dismiss False Claims Act actions. Read a new “FCA Insider” blog post for analysis of this decision and its implications for future cases after this summer’s three-way circuit split on… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Department of Justice Announces Increased FCA Enforcement Through New Civil Cyber-Fraud Initiative

On October 6, 2021, the Department of Justice (DOJ) announced a new Civil Fraud Cyber Initiative to “combine the department’s expertise in civil fraud enforcement, government procurement and cybersecurity to combat new and emerging cyber threats to the security of sensitive information and critical systems.”… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Tide Is Turning Against FCA Case Dismissals

According to a July 28 article in Law360 by McGuireWoods lawyers Michael J. Podberesky, John S. Moran, Todd R. Steggerda, David Pivnick and Cassandra M. Burns, the U.S. Supreme Court’s recent decision declining to review an appeal of a Seventh Circuit case that could have resolved a three-way circuit split regarding the proper standard for… Continue Reading

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