False Claims Act Investigations & Defense

Overview

The U.S. Department of Justice has recovered billions of dollars in False Claims Act (“FCA”) settlements and judgments in civil cases involving alleged fraud against the government.

2018 marked the ninth straight year of more than $2 billion recovered annually under the FCA, bringing the total recovery since 2010 to $35.4 billion. On top of these sums, nearly 800 new FCA matters were initiated last year, more than 84% of which were actions brought by private whistleblowers seeking bounties under the FCA’s qui tam provisions. Not to be left behind, most states have enacted their own false claims laws including qui tam provisions, and state FCA claims are expected to rise.

More than $35 Billion: U.S. Justice Department Recoveries for False Claims Act Cases in the Past Nine Years.

Today, virtually any company or person receiving federal or state funds may be at risk of an FCA investigation or lawsuit, including traditional targets in healthcare and government contracting. With the potential for treble damages and penalties, as well as collateral consequences from suspension and debarment to exclusion from Medicare and Medicaid programs, the stakes for companies have never been higher.

How We Can Help

False Claims Act

For more than two decades, Blank Rome has represented companies and individuals in FCA investigations and litigation. Our False Claims Act practice draws upon the experience of many former federal prosecutors and leverages capabilities from the Firm’s government contracts; state, federal, and joint investigations; and white collar defense practices to provide comprehensive service and advice to our clients.

Our Focus

We have a successful history of resolving FCA matters for clients prior to intervention and often short of litigation. When litigation is necessary, we draw on a seasoned team of trial attorneys, many of whom are former prosecutors, and litigate aggressively in federal and state courts around the country. We also have substantial experience resolving suspension and debarment cases and similar eligibility matters (including Medicare and Medicaid exclusions) that may arise from an FCA case.

Our Services

We successfully represent clients against FCA allegations involving virtually all forms of alleged misconduct:

  • Cost and labor mischarging
  • False representations and certifications
  • GSA Schedule violations (including those based upon pricing and discounting disclosures)
  • Kickbacks
  • Medicare/Medicaid fraud
  • Organizational conflicts of interests
  • Truth in Negotiation Act violations

Our clients span industries, including: 

  • Professional services
  • Hardware and software
  • Logistics
  • Finance
  • Pharmaceuticals
  • Medical/surgical devices
  • Healthcare services

Procurement Fraud

Our Chambers USA-ranked Government Contracts Practice handles procurement fraud matters involving civilian and defense agencies. We draw on our deep insight into the unique statutes, regulations, and other contracting requirements that underlie FCA actions to build the strongest possible defense.

Healthcare

In the healthcare sector, Blank Rome has represented pharmaceutical and biologics companies, medical/surgical device manufacturers, clinical laboratory companies, hospitals, wholesalers, distributors, and other providers in a wide range of matters including allegations of Medicare/Medicaid fraud. 

Interdisciplinary Approach

Blank Rome also has unique experience in resolving state FCA investigations and litigation through our state, federal, and joint investigations and white collar practices.
 

Experience

Defense and Government Services

  • Successfully settled litigation in the U.S. District Court for the Eastern District of Virginia for a leading private security, training, risk assessment, and solutions provider, involving claims of retaliatory discharge under the False Claims Act (“FCA”) by former employees. The plaintiffs alleged that they were wrongly discharged for reporting that the company submitted false results of weapons qualifications testing under a State Department contract in Afghanistan. After extensive negotiations, the matter settled for a fraction of the amount demanded by the plaintiffs. Related to that matter, we also represented the client in connection with an investigation by the Department of Justice and the State Department’s Inspector General under the FCA into similar allegations regarding weapons qualifications testing.
  • Resolved through motions practice, litigation, and mediation FCA litigation related to technology alliances for one of the largest systems integrators in the world, as part of a series of cases involving the largest procurement-related FCA litigation in recent history. The case included allegations of kickbacks, defective pricing, false statements, and anti-competitive activity and involved dozens of government contracts.
  • Represented one of the world’s largest software companies in parallel criminal and civil FCA actions involving GSA Schedule contract pricing and discounts. We prepared witnesses for grand jury appearances and made detailed presentations that convinced the government to resolve the matter without criminal liability. We then successfully resolved the civil FCA claims without litigation and at a fraction of the government’s demand.
  • Successfully settled through pre-litigation negotiations an FCA suit related to charges for cargo shipped to Iraq and Afghanistan for the world’s largest container shipping company, part of a series of cases involving the largest alleged fraud linked to the wars in Afghanistan and Iraq.
  • Obtained dismissal of FCA claims against a major hardware and software reseller, based upon alleged violations of the Trade Agreements Act. The case was dismissed early based on our aggressive procedural motions.
  • Successfully represented an international software, hardware, and networking company accused of false claims relating to GSA Schedule contract pricing and discounts. Following the receipt of subpoenas and civil investigative demands, we prepared witnesses, defended depositions, and convinced the government to resolve the matter at a substantially reduced amount.
  • Obtained summary dismissal of a complaint filed by the Department of Justice in the Middle District of Florida accusing a logistics services contractor of FCA violations arising from allegedly unnecessary repair services.
  • Successfully defended a fighter aircraft manufacturer against allegations of illegal gratuities, labor mischarging, and improper progress payment requests. The district court granted our motion to dismiss, and we defended that dismissal in the court of appeals.
  • Secured a summary judgment ruling on behalf of a leading engineering services company defending allegations of false claims under a fixed-price contract. We established favorable authority regarding the application of the FCA to fixed-price contracts.
  • Resolved through pre-litigation negotiations with United States Attorney’s Office and Main Justice an FCA investigation related to personnel costs under international support services contracts with the United States Army, arising after Defense Contract Audit Agency referral.
  • Obtained favorable settlement of FCA allegations involving alleged time-charging misconduct by a major provider of deactivation and decommissioning services to the Department of Energy.
  • Achieved successful pre-litigation settlement of FCA claims for a leading manufacturer of specialty products, arising out of an investigation into alleged kickbacks paid in connection with government contracts with the U.S. Navy and other government customers.
  • Successfully resolved a corruption, money-laundering, conspiracy, and FCA investigation involving a dual U.S./Afghan citizen owner of an Afghan company supplying services to the U.S. military in Afghanistan. The client was arrested and confined to his home during the investigation. We developed and presented facts to the DOJ demonstrating that his services were legitimate and that U.S. military personnel making allegation against our client were themselves corrupt and untrustworthy. The case was resolved through payment of a modest “no fault” civil fine and the DOJ dropped all criminal charges.
  • Successfully positioned an international shipping company in FCA litigation, related to Department of Defense contract fraud, to resolve the matter civilly with a minimal settlement.

Healthcare

  • Possess decades of experience representing numerous pharmaceutical companies, hospitals, and physicians in various Medicare/Medicaid fraud cases.
  • Achieved very favorable resolution for a global pharmaceutical company in one of the largest and longest-running FCA cases in history under the Medicare and Medicaid programs related to average wholesale pricing (“AWP”) of drugs. This qui tam case remained under seal for more than a decade. Although the government intervened in cases against many other pharmaceutical companies, we convinced them not to intervene against our client. This case produced numerous federal and state private class actions, federal multidistrict litigation proceedings, and multiple state FCA actions. We litigated these cases, narrowed the issues and damages, and resolved the matters successfully for our client.
  • Served as settlement counsel and successfully resolved matters involving three major pharmaceutical companies accused of FCA violations relating to the Medicare and Medicaid program, and other state and federal healthcare billing fraud.
  • Successfully represented a home healthcare agency in an FCA investigation in the Eastern District of New York. The government initially sought criminal charges against the company and some executives, but we were able to demonstrate that there was no criminal conduct. We achieved civil resolution for the company.
  • Achieved civil resolution for a New York hospital system in an FCA matter involving allegations of improper service coding and billing to Medicaid. Working with reimbursement experts, we resolved the matter through monetary payment of a small percentage of the government’s initial claim. The client was able to stay in the Medicaid system and continue to operate its hospitals.
  • Successfully represented a wound care company under investigation for alleged fraudulent billing to Medicaid and Medicare programs. After numerous presentations to the DOJ and other investigating agencies, the matter was closed without any action against our client.
  • Achieved a successful civil resolution for a regional medical center in connection with parallel criminal and FCA investigations of physicians alleged to have performed unnecessary medical procedures, after persuading the government not to bring criminal charges against the center.

Other Federal Programs and Disaster Relief

  • Secured declination from criminal prosecution against a disaster relief contractor in connection with investigation involving alleged violations of Stafford Act contracting preferences.
  • Obtained dismissal with prejudice of an FCA suit under the FCA’s public disclosure bar in FCA litigation against a former member of Congress; we also secured an order for sanctions against relator and his counsel.
  • Settled an FCA action for a leading nutritional products manufacturer for a fraction of the initial demand, resolving allegations relating to statements in connection with a federal loan program.
  • Represented an individual accused of violating the FCA in connection with the Small Business Administration’s set-aside programs. The government initially demanded a criminal plea to multiple felony counts and payment of a $141 million fine. We ultimately resolved the case through a one-count felony plea with a sentence of probation and payment of $125,000.
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