FCA NOW

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...

Eight Years Later: “Speculative” and “Straightforward” FCA Allegations Against Walmart Dismissed

Walmart successfully ended eight years of protracted litigation under the False Claims Act (“FCA”) on June 4, 2021, when the Sixth Circuit affirmed dismissal of Medicare and Medicaid fraud allegations against the major retailer.  The case was first filed in February 2013.  See United States ex rel. Sheoran v. Wal-Mart Stores E., No. 13-10568, 2019 U.S. Dist. LEXIS 140710, at *2 (E.D. Mich. Aug. 20,...

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,...

District of New Jersey Rules Prescription Drug Events Tainted By Alleged Kickback Schemes Constitute False Claims

A federal judge recently ruled that submission of electronic data to the government can, under appropriate circumstances, give rise to liability under the False Claims Act. In U.S. ex rel. Marc Silver et al. v. Omnicare Inc. et al., 1:11-cv-01326 (D.N.J. Apr. 13, 2021), U.S. District Court Judge Noel C. Hillman granted a relator’s motion to amend his complaint to assert FCA claims premised on...

A New Circuit Split: FCA Protects Former Employees from Post-Employment Retaliation in the Sixth

Over a vigorous dissent last week, a panel of the U.S. Court of Appeals for the Sixth Circuit vacated a ruling from the U.S. District Court for the Eastern District of Michigan and held the False Claims Act’s anti-retaliation provision protects former employees alleging post-termination retaliation. United States ex rel. Felten v. William Beaumont Hosp., No. 20-1002, 2021 U.S. App. LEXIS 9387 (6th Cir. Mar....