Category: Settlements

Enforcement Standards Tighten on Private Insurers: Sutter Health Settles for $90 Million Following Dispute With DOJ

On August 30, 2021, the Department of Justice (“DOJ”) announced that Sutter Health and several of its affiliated entities (“Sutter”) agreed to pay a total of $90 million to settle allegations that Sutter violated the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733, by “knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans.”  Sutter Health and Affiliates to Pay...

No Claim Too Small: Contractor Settles FCA Claims for Failure to Return $14,000 of Reimbursed Equipment

On May 28, 2021, a District of Maine judge granted a joint motion for stipulated judgment in favor of the United States, ending the False Claims Act suit against a Coast Guard contractor hired to assist with the excavation of a World War II-era airplane crash site.  United States of America v. Luciano A. Sapienza, et al., No. 2:21-cv-00073-NT (Me.). As alleged in the amended...

Northern District of Texas Refuses to Enforce Purported Pre-Filing Qui Tam Claim Release on Public Policy Grounds

On April 30, 2021, a Northern District of Texas judge denied a motion to dismiss an FCA qui tam action alleging “a fraudulent scheme to obtain Government subcontracting opportunities reserved for eligible small businesses under the Small Business Act.” United States ex rel. Haight v. RRSA (Commer. Div), LLC, 3:16-CV-1975-S, 2021 U.S. Dist. LEXIS 82894, at *1-4 (N.D. Tex. Apr. 30, 2021). In the complaint,...

Justice Department Annual Release Shows Decreased FCA Recoveries But Increased FCA Matters in FY2020, Suggesting Likely Uptick in 2021

On January 14, 2021, the United States Department of Justice (“DOJ”) issued its annual press release highlighting its recoveries from False Claims Act (“FCA”) enforcement over the last fiscal year.  Total recoveries in FY2020 exceeded $2.2 billion, with the majority—$1.8 billion—of those recoveries coming from the healthcare industry.  These totals are down substantially from FY2019, in which total recoveries exceeded $3 billion with $2.6 billion...

Borrowers and Banks Beware: The New Year Brings the Nation’s First False Claims Act Settlement for Paycheck Protection Program Fraud

On January 12, 2021, the Eastern District of California entered into a civil settlement with a Paycheck Protection Program (“PPP”) borrower and its CEO to resolve allegations of fraud.  The settlement stemmed from a $350,000 PPP loan that SlideBelts Inc., an internet retail company, received even though it was a prohibited borrower as a debtor in bankruptcy.  This is the first civil settlement for PPP-related...

$4.47 Million False Claims Act Settlement Targets Set-Aside Contractors, Affiliates, and Even Third-Party Bonding Company

Over three years after the filing of the initial sealed complaint, a New York-based construction company and several affiliates—including its bonding company—have agreed to pay a combined $4.47 million to settle a False Claims Act case alleging a decade-long scheme to fraudulently obtain federal contracts set aside for Service-Disabled Veteran-Owned Small Business Concerns (“SDVOSBCs”) and small businesses operating in Historically Underutilized Business Zones (“HUBZones”). United...

Importer and Its Executives Pay $5.2 Million Under FCA for Evading U.S. Tariffs

An importer recently agreed to pay $5.2 million to settle a False Claims Act (“FCA”) case alleging evasion of antidumping duties (“AD”) on wooden bedroom furniture from China. The importer, Blue Furniture Solutions, LLC (now doing business through its successor, XMillenium LLC), allegedly imported merchandise into the United States using false descriptions and invoices that claimed the merchandise was outside the scope of the China...

$145 Million Settlement Shows the Depth of Government’s Effort to Combat Opioid Crisis and its Interest in Fraud Actions Against Electronic Health Records Companies

Less than a year after United States Attorney Christina E. Nolan warned electronic health records (“EHR”) companies in a DOJ press release that they “should consider themselves on notice” following a $57.25 million FCA settlement with EHR software developer Greenway Health LLC, the DOJ announced in a recent press release a $145 million settlement with another EHR vendor, Practice Fusion, Inc.  The settlement includes $26...

Justice Department Touts FY2019 False Claims Act Statistics as Evidence of Administration’s “High Priority” Against Fraud, but the Numbers Show Less of a Priority on Qui Tams

Earlier this month, the United States Department of Justice issued a press release to announce recoveries of over $3 billion from False Claims Act cases in FY2019. In making the announcement, Assistant Attorney General Jody Hunt of the Civil Division emphasized, “The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the...

False Claims Act: New Developments for an Old Law

The past 18 months have been a (relatively) wild time for the False Claims Act — on the books since 1863. In FY2018 the Department of Justice obtained more than $2.8 billion in settlements and judgments from cases involving fraud and false claims against the United States government. Add to this staggering statistic the fallout of the Supreme Court’s decision in Universal Health Services Inc....