Government Program Fraud, False Claims Act & Qui Tam Litigation Playbook

The U.S. Department of Justice (DOJ) has vowed to hold accountable the individuals and entities who “knowingly and improperly sought PPP loans or forgiveness of those loans.” In furtherance of this promise, the DOJ has reached settlement with two companies and prosecuted two individuals, all of whom were suspected of fraudulently seeking relief from the Paycheck Protection Program (PPP).

The U.S. Department of Justice (DOJ) continued its health care fraud enforcement activity in June 2023, announcing two convictions and a national enforcement action involving charges against 78 individuals and over $2.5 billion in alleged fraud. This enforcement activity relates to efforts to defraud Medicare by billing for supplies that were not medically necessary, compounding drugs to maximize reimbursement from TRICARE, and other allegations of alleged health care fraud, telemedicine fraud, and opioid abuse-related schemes.

The U.S. Department of Justice (“DOJ”) announced several settlements related to False Claims Act (“FCA”) allegations this June. The settlements involved various types of health care entities, which shows the DOJ’s continued interest in pursuing FCA allegations across the health care industry.

On February 7, 2023, the U.S. Department of Justice (“DOJ”) released its annual False Claims Act (“FCA”) recovery statistics and announced that it had obtained more than $2.2 billion in settlements and judgments in fiscal year 2022 from civil cases involving fraud and false claims against the government.[1] The significant decrease in 2022 recoveries stands in stark contrast with DOJ’s near-record breaking fiscal year 2021 where it obtained more than $5.6 billion in settlements and judgments. That said, fiscal year 2022 marked the fourteenth straight year where recoveries exceeded $2 billion.

On November 1, 2022, the Department of Justice (“DOJ”) announced that Florida-based electronic health record (“EHR”) vendor, Modernizing Medicine (“ModMed”), agreed to a $45 million settlement with the United States to resolve civil claims that it violated the False Claims Act (“FCA”) and Anti-Kickback Statute (“AKS”) by accepting and providing unlawful remuneration in exchange for referrals, causing users to submit tainted claims for federal incentive payments.

On July 20, 2022, the Office of Inspector General (“OIG”) for the Department of Health and Human Services issued a Special Fraud Alert (the “Alert”) on potential fraud schemes involving companies that provide telehealth, telemedicine, or telemarketing services (referred to collectively in the Alert as “Telemedicine Companies”).[1]

On October 6, 2021, Deputy Attorney General Lisa O. Monaco announced a new Civil Cyber-Fraud Initiative, by which the Department of Justice (DOJ) will utilize the False Claims Act (FCA) as a tool to enforce cybersecurity standards required of federal contractors and grant recipients.

On September 8, 2021, the U.S. Department of Justice (DOJ) announced that it reached a $17 million settlement with BAYADA, a Moorestown, New Jersey-based home-health company, and certain of its affiliates (collectively referred to as BAYADA) for alleged violations of the False Claims Act (FCA) and Anti-Kickback Statute (AKS). The settlement resolves claims arising out of a qui tam complaint filed against BAYADA by the company’s former director of strategic growth alleging that the company billed federal payors for services tainted by alleged kickbacks.

On August 26, 2021, the Department of Justice, the U.S. Attorney’s Office for the Southern District of Florida, and the Small Business Administration’s Office of Inspector General announced a $287,055 settlement resolving alleged violations of the False Claims Act related to a false loan application and misappropriated Paycheck Protection Program loan proceeds by All in Jets LLC owner, Seth A. Bernstein.

Recently, the U.S. Department of Justice issued a memorandum and interim final rule, which effectively revoked elements of the “Brand Memorandum” and reinstated the use of federal guidance documents in False Claims Act cases.

On May 10, 2021, the U.S. Department of Justice (DOJ) announced that the University of Miami (UM) agreed to pay a $22 million settlement concerning alleged violations of the False Claims Act (FCA).

The United States Department of Justice (DOJ) continues its aggressive pursuit of those attempting to fraudulently obtain funds made available through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as reflected in its May 17, 2021 announcement of yet another criminal resolution of a case involving individuals accused of defrauding the Paycheck Protection Program (PPP).

As we reflect on the past in order to prepare for the future, it becomes increasingly clear that 2021 will bring greater use of one of the government’s most powerful civil enforcement tools—the False Claims Act—to root out fraud and abuse involving government funds in myriad industries and in novel ways.

As we reflect on the past in order to prepare for the future, it becomes increasingly clear that 2021 will bring greater use of one of the government’s most powerful civil enforcement tools—the False Claims Act (“FCA”)—to root out fraud and abuse involving government funds in a myriad of industries and in novel ways. 

Earlier this year, the U.S. Department of Justice released its annual False Claims Act recovery statistics and announced that it had obtained more than $3 billion in settlements and judgments in fiscal year 2019 from civil cases involving fraud and false claims against the government.

Both federal and state agencies and courts have adopted myriad actions in response to the ongoing coronavirus pandemic.

On May 7, 2019, the Civil Division of the Department of Justice (“DOJ”) issued formal guidance to DOJ attorneys regarding factors to be considered in determining the nature and extent of cooperation credit to be awarded in connection with resolving False Claims Act (“FCA”) matters.

Late last year, the U.S. Department of Justice (DOJ) released its annual False Claims Act (FCA) recovery statistics and announced that it obtained over $3.7 billion in settlements and judgments in fiscal year 2017 from civil cases involving government program fraud and false claims.