Archive for the ‘Defenses’ Category

More Resources for U.S. Attorneys to Combat Civil Fraud

In an attempt to speed up civil fraud investigations in the U.S., Attorney General Eric Holder expanded the power of the False Claims Act by signing an order allowing U.S. Attorneys to issue civil investigative demands under the Act.

Civil investigative demand allows for a subpoena of documents, depositions and interrogatories. Currently the Justice Department can issue these investigative demands before it files a complaint or before signing on to qui tam litigation. This makes the information accessible before the potential defendant can conduct its own discovery.

Until this year, the Attorney General could exclusively approve civil investigative demands. Because of this limitation, they were not common. Last spring, however, an anti-fraud bill made its way through congress and subsequently established the practice of allowing the Attorney General to delegate the power to Assistant Attorney General for the Civil Division. In a further expansion, Attorney General Holder also allowed Assistant Attorney General Tony West to redelegatee such powers to U.S. Attorneys, with notice and reporting requirement.

Posted in Evidence, False Claims, Federal False Claims Act, Qui Tam LitigationNo Comments

The Department of Justice and the Department of Health and Human Services Unite to Fight Health Care Fraud

The Department of Justice (DOJ) and the Department of Health and Human Services (HHS) are working together to prevent, detect, and prosecute health care fraud. At the National Health Care Fraud Summit held on January 28, 2010, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder discussed, among other things, the accomplishments of the Health Care Fraud Prevention and Enforcement Action Team (HEAT)—an initiative created in May 2009 by the DOJ and HHS.  The HEAT has increased the number of Medicare Fraud Strike Forces, which now operate in seven major cities across the country:  (1) Baton Rouge, Louisiana; (2) Brooklyn, New York; (3) Detroit, Michigan; (4) Houston, Texas; (5) Los Angeles, California; (6) Miami, Florida; and (7) Tampa, Florida.  Since the first Strike Force began operations in Miami, Florida in 2007, Strike Force teams have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program in excess of $1 billion dollars.

On February 1, 2010, President Obama unveiled the 2011 fiscal year budget.  This budget allocates $1.7 billion for efforts to combat health care fraud.  This is an increase of $250 million over the 2010 enacted level.   This increased support will, among other things, expand the HEAT and implement a set of proposals to strengthen Medicare, Medicaid, and the Children’s Health Insurance Program.  The ultimate goal is to prevent health care fraud before it occurs, detect it as early as possible when it does occur, and vigorously enforce all penalties and recourses available when fraud is identified.

Posted in Anti-Kickback Statute, Defense Contracts, Government Knowledge, Healthcare FraudNo Comments

Government’s Extensive Knowledge of a Defendant’s Wrongful Conduct May Preclude a Finding that the Defendant Possessed the Necessary Knowledge to Submit a False Claim

By: Joel Androphy, Rachel Grier and Stephanie Gutheinz

To establish liability for submitting false claims under the FCA, it must be shown that the defendant acting knowingly.  Knowing conduct can be demonstrated by showing that the defendant either acted (1) with actual knowledge that the information was false, (2) with deliberate ignorance of the truth or falsity of the information, or (3) with reckless disregard of the truth or falsity of the information. 

A finding of knowing action on the part of the defendant may be precluded, however, if it can be shown that the government had ample knowledge of the defendant’s conduct.  The burden of proof required to obviate a defendant’s liability based on government knowledge is considerable and can only be satisfied with evidence that the defendant and the government had an ongoing dialogue about the activities underlying the submission of the false claims. 

It must also be shown that the defendant completely cooperated and shared all information with the government in such a way that it would not have been possible for the defendant to knowingly submit false claims.  Mere allegations that the government had some knowledge of the defendant’s conduct, audited the defendant, or even reviewed thousands of documents related to the claims are not sufficient to negate the defendant’s liability.  Rather, courts will only find as a matter of law that the defendant could not have possessed the requisite state of mind to be liable under the FCA where the government approved of the defendant’s conduct, or where the government had extensive knowledge of the defendant’s conduct.  United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 2009 WL 3161828 (D. Colo. Sept. 30, 2009).

Posted in Defenses, False Claims, Federal False Claims Act, Government Knowledge, Mens ReaNo Comments


The Defenses section of this blog is currently being developed.  For more information, visit the Qui Tam section of the Berg & Androphy web site.

Posted in DefensesNo Comments

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