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Presented by Hodgson Russ, the Whistleblower Blog is written by a team of lawyers experienced in successfully guiding both whistleblowers and companies accused by whistleblowers of wrongdoing through the False Claims Act process.
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Daniel C. Oliverio
Showing 8 posts by Daniel C. Oliverio.
The False Claims Act and PPP: Practical Considerations
Much has been written over the past several months about the application of the False Claims Act to PPP loan fraud. While, at first look, the cases seem appealing, it is important to consider the practical implications of bringing such a case and whether, in the general scheme of things, a PPP case is worthwhile.
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New York Expands Healthcare Worker Whistleblower Protections
On June 17, 2020, Governor Cuomo signed into law an amendment to the New York healthcare whistleblower law to create a new protected category, “improper quality of workplace safety,” and to expand protected channels to include news and social media outlets for reporting violations of improper quality of patient care or workplace safety. Under the new amendment, healthcare employers cannot take retaliatory action because an employee complains to the press or on social media about workplace conditions that significantly threaten employee health.
DOJ Now Requires Certain Factors Be Met Before Pursuing Off-Label Cases
Over the years, the Department of Justice has vigorously pursued off-label sales of pharmaceuticals by some of the largest pharma companies in the world. By statute, pharma companies cannot market a product “off-label,” while a physician may prescribe off-label, if he or she believes a particular medicine is effective. This rule created a tension between pharma and physicians.
Sharing Agreements, Consolidation, and Relators’ Share
More and more, we are seeing multiple and separate qui tam cases filed across various districts that, in part, contain overlapping claims, allege common sets of facts, or supplement each other in a way that, if combined, results in much stronger complaint. The problem is simple: absent consolidation and a sharing agreement, the government has a mess on its hands when trying to determine who is the “first” relator for purposes of the relators’ share.
Sharing Agreements Beat First-Relator Fights
As cases become more complex and multiple allegations arise, it is more and more frequently the case that multiple relators will file complaints in different districts covering, at least for the most part, common subject matter. Rarely, however, in these types of cases, can one make a definitive judgment about whether the allegations overlap, either in whole or in part, are identical, or are distinctly separate. U.S. attorneys want to be able to consolidate cases and use all of the allegations in a single False Claims Act prosecution. So what to do about the relators?
Amendments to False Claims Act May Affect “Original Source” Issues
The False Claims Act amendments found in the Fraud Recovery Enforcement Act of 2009 appear to broaden the “original source” rules by eliminating the requirement that a person must have “direct” knowledge of information underlying False Claims Act allegations.
Parallel Prosecutions: Good or Bad in a Whistleblower Case?
A common scenario: a whistleblower files a solid False Claims Act complaint with an ample disclosure. The government takes the disclosure and complaint, does some preliminary investigation, and opens a criminal file and grand jury investigation. The civil False Claims Act goes dormant and the Federal Rule of Criminal Procedure 6(e) prohibits the U.S. attorney from discussing any grand jury evidence with the whistleblower or whistleblower’s counsel. De facto, the government has taken over the case. That can only be good. Simply, if there is a criminal conviction by plea or after trial, and the factual basis for the conviction is the same as that alleged in the complaint, the case is a winner. And if there is a plea, global settlements are the rule rather than the exception. So the relator gets paid at the same time the criminal plea is entered.
The False Claims Act
The False Claims Act, first passed by congress at the time of the Civil War in response to government fraud in the purchase of war supplies, really hasn’t changed much over the years. While the False Claims Act is now directed toward substantive areas like health care, pharmaceuticals, and sophisticated government transportation contracts, the claims are no different than back when. Simply, unscrupulous persons and entities attempt to defraud the government (and the taxpayers) by selling inferior goods, by charging more than what has been agreed to by the government, and by providing goods or services that are not as represented in agreements with the government. The dramatic increase in government programs (Medicare, Medicaid, HUD, HHS) has resulted in a commensurate number of ways for the government to be defrauded within the scope of the False Claims Act. So while the modern claims under the act involve things like off-label sales of prescription pharmaceuticals, overcharges under the Medicare program, and phony claims for the transportation of military parts, that is the only difference from those that sold inferior gun powder, blended blankets instead of wool, and mules instead of horses to the Union army and the government.
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