FCA NOW

Latest PPP Fraud Settlement Showcases Civil and Criminal Penalties for Knowingly Submitting False Claims

The Department of Justice (“DOJ”) continues racking up more settlement agreements under the False Claims Act, 31 U.S.C. § 3729 et seq (“FCA”) with companies and individuals alleged to have improperly used funds received through the Paycheck Protection Program (“PPP” or “Program”). The latest PPP fraud settlement illustrates that attempts to fraudulently obtain forgiveness of PPP loans used for ineligible expenses invites potential liability under...

DOJ Shows No Sign of Slowing Down Prosecution of Individuals Connected to FCA Cases

Following a record year for False Claims Act (“FCA”) settlements and judgments in 2021, the Department of Justice (”DOJ”) continues to aggressively pursue the prosecution of not only corporations, but also the individuals connected to corporate criminal cases. Within the first quarter of 2022, the DOJ has already announced numerous False Claims Act violations involving corporate defendants, including a $260 million settlement with pharmaceutical company...

DOJ Announces First Settlement Under New Civil Cyber-Fraud Initiative

In October 2021, the Department of Justice (“DOJ”) announced its new Civil Cyber-Fraud Initiative, led by the Civil Division’s Fraud Section, to enhance its ongoing efforts to address cybersecurity threats.  The initiative utilizes the False Claims Act (“FCA”) to prosecute cybersecurity fraud by federal contractors and grant recipients who put government information or systems at risk through deficient cybersecurity standards.  Cybersecurity risks that the initiative...

Home-Health Services Company Settles After Allegations of Double-Billing Scheme

The Department of Justice recently announced that a home-health services company has agreed to pay over $45,000 to resolve alleged False Claims Act (“FCA”) violations.  Professional Family Care Services, Inc. (“PFCS”), a North Carolina corporation, faced allegations of fraudulent billing for work by an employee that was convicted of wire fraud and sentenced to prison for her role in the alleged scheme. For two years...

DOJ Announces More FCA Settlement Agreements Over PPP Fraud

Fresh off the new year, the Department of Justice (“DOJ”) continues to announce new settlements under the False Claims Act, 31 U.S.C. § 3729 et seq (“FCA”)—further cementing the trend of private parties suing borrowers for violating requirements of the Paycheck Protection Program (“PPP” or the “Program”). Two new FCA settlements were announced earlier this month involving relators’ allegations that borrowers made false statements when applying for...

Settlement Illustrates Continued Use of FCA to Combat PPP Fraud

The trend of private parties suing businesses under the False Claims Act, 31 U.S.C. § 3729 et seq (“FCA”) for violating requirements of the Paycheck Protection Program (“PPP” or the “Program”) continues. Just recently, the Department of Justice (“DOJ”) issued a press release announcing its latest settlement in an FCA case involving Sextant Marine Consulting, LLC (“Sextant”) and a whistleblower named J. Bryan Quesenberry (“Relator”)....

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...

Fired Employee Alleges Employer Unlawfully Retaliated Against Him For Complaining of PPP Fraud

Civil litigation by private parties alleging False Claims Act (“FCA”) violations related to Paycheck Protection Program (“PPP”) fraud appears to be heating up.  On September 22, 2021, a former restaurant manager filed a complaint in the Eastern District of New York alleging he was unlawfully terminated from his employment in retaliation for complaining to his employer that it had unlawfully spent its PPP loan proceeds. ...

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...

SCOTUS Denies Review of Dismissal at DOJ’s Request; Circuit Split Remains

On June 28, 2021, the United States Supreme Court denied review of a Seventh Circuit decision affirming the Department of Justice (“DOJ”)-requested dismissal of a False Claims Act (“FCA”) suit alleging a drug kickback scheme.  Cimznhca LLC v. United States, No. 20-1138, 2021 U.S. LEXIS 3404 (June 28, 2021).  As a result, the circuit split regarding the standard that applies to a Government’s motion to...