Category: Settlements

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

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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

Eric Weisenburger

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

Kirk Schuler

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

Caitlin Hull

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

Dave Townsend

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

Vanessa J. Szalapski

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

Kirk Schuler

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

Alex Hontos

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....

Software Provider and DOJ Reach $8.6M Settlement for FCA Case Involving Alleged Cyber Security Shortcomings

Jack Huerter

Amid increased public and government attention to cyber security, a qui tam plaintiff’s lawsuit has resulted a large settlement for a government contractors’ purported misrepresentations regarding compliance with government cyber security standards. In what is believed to be the first-of-its-kind settlement of an FCA claim premised upon cyber security misrepresentations, Cisco Systems recently agreed to pay $8.6 million to the federal and state governments. The...

An Ambulance Provider’s Long Road to Settlement

Vanessa J. Szalapski

On June 20, 2019, more than six years after the case was first set into motion by the Relator, the U.S. Attorney’s Office for the District of Maryland announced in a press release that Hart to Heart Ambulance Services, Inc. (“Hart to Heart”) settled a false claims act case—which alleged that it submitted false claims to Medicare for ambulance transports that were not medically necessary—for...