False Claims Act in 2014: Implementation Issues
Overview:With record recoveries, the Department of Justice, qui tam whistleblowers, and state Attorneys General have continued to step up their enforcement efforts in False Claims Act cases. Armed with enhanced legislation and stricter enforcement tools, DOJ and other agencies, are able to more easily identify and act on fraud. Now, more than ever, government contractors in various industries including defense, aerospace, healthcare, and financial services, must be mindful of this powerful statute and vigilant about compliance or face stiff penalties.
The Knowledge Group has assembled a panel of key thought leaders and practitioners to help business executives, consultants, auditors, and attorneys understand the most significant issues and recent developments with respect to the increased risks associated with the False Claims Act.
Robert J. Nelson, Partner and Chair of the False Claims Act Practice Group,
Lieff Cabraser Heimann & Bernstein, LLP
Part I: Introduction
- FCA Background/History
- Origins: Lincoln's Law>
- Currently applies to many federal programs
- Explain FCA's general structure
- Private/public partnership
- Whistleblowers provide the government an opportunity to investigate and intervene
- Explain Damages/Penalties/Relator's award
- Whistleblower's Role
- Investigate fraud
- File under seal
- Government's Role
- Investigates Fraud
- Intervenes if appropriate
- Takes lead litigating the case
- Treble Damages + Whistleblower's share
Part II: Navigating the Statute
- What triggers liability under the FCA?
- Prima facie case
- Key term: "False Claim"
- Common Examples of False Claims
- Expanding/Evolving Definition of a False Claim
- Key term: "Knowingly"
- Key term: "Damages"
- Treble Damages Explained
- Calculating the Whistleblower's Share
- Public Disclosure Bar
- Recent amendment
- Original Source Rule
- Recent amendment
- First to File bar
- Anti-retaliation provisions
- Recent shift in case law
Part III: Recent Changes
- FERA amendments
- Reverse False Claims
- Conspiracy Liability
- Of Particular Importance: CIDs
- Former system
- Recent change
- What this means
- PPACA amendments
- Public Disclosure
- Original Source
- Of particular importance: Anti-Kickback Statute
Part IV: The View from 10,000 Feet/What the Future Holds
- USDOJ statistics
- Common Areas Where FCA is employed
- Noticeable Trends (using graphs)
- Recent trend: Excessive Fines Clause
- Recent Trend: State FCA Statutes
- Potential new areas
Michelle L. Rogers, Partner,
- Context: Financial Fraud as Government Priority.
- The FCA continues to be a powerful for the DOJ, and it is turning to it with increasing frequency in all areas.
- Financial Fraud FCA Enforcement
- As DOJ has focused on financial fraud in recent years, it has turned to the FCA with increasing frequency.
- Evolution of FCA Cases
- Catching up to – and in some cases passing – other industries, the government's use of the statute in financial services cases is quickly evolving as it continues to test more aggressive theories of wrongdoing.
- Trends and Predictions / Mitigating Risk
- Based on this, there are several trends and predictions that all government program participants should consider, as well as ways to mitigate risk.
Jennifer M. Wollenberg, Senior Associate,
Fried, Frank, Harris, Shriver & Jacobson LLP
- Topic: Recent Developments Affecting Potential Exposure under the FCA
- The Wartime Suspension of Limitations Act Threatens the FCA's Statute of Limitations
- The Seventh Circuit Takes On the Overreaching "Gross Trebling" Approach to FCA Damages
- Constitutional "Excessive Fines" Analysis May Not Longer Offer the Same Penalties Protection
SEGMENT 3: Mark Dostal, Director, National Government Contracts Practice,
- Managing compliance with your primary business systems and processes are a key defense to limit FCA exposure. Companies need to maintain focus on the foundational systems for Contract Management, Estimating, and Accounting, coupled with regular Ethics & Compliance training.
- FCA violations can surface from many sources, but most are qui tam relators. There are certain areas of potential violations that are commonly alleged by realtors.
- Not all alleged violations may be immediately recognizable as FCA cases. If you do have an alleged wrongdoing, take early steps to understand your threats and risks to potentially resolve the issue before it becomes a FCA case.
- If you have a FCA case, there are many challenges in successfully defending against the allegations.
Joseph Cheriathundam, Managing Director,
StoneTurn Group, LLP
Data Analytics is an essential component to an effective FCA compliance program throughout the life-cycle of a business relationship with the government.
- Companies should perform a review of their information systems as they are negotiating contracts/schedules with GSA to ensure that the necessary data are being captured, maintained and archived to support auditability
- Data Analytics should be regularly, and sometimes continuously, leveraged to identify anomalies before they turn into issues
- It is critical for companies to have Data Analytic expertise accessible (internal/external) to them if an FCA issue is ever raised
Who Should Attend:
- Government Contractors Including Healthcare Providers and Others
- Attorneys and Consultants who advise clients on FCA related issues
- General Counsel
- Senior Executives
- Risk Executives
- Audit & Compliance Executives from Government Contractors
- And other related and interested professionals
Robert J. Nelson is a partner at Lieff Cabraser and chairs Lieff Cabraser’s False Claims Act practice group. Mr. Nelson has been the lead lawyer on numerous whistleblower cases, including a $46 million settlement involving Sutter Health in 2013, as well as a $78.5 million settlement involving the University of Phoenix. Mr. Nelson was recognized in 2010 as California Lawyer magazine's Attorney of the Year for his work on the University of Phoenix case. Mr. Nelson previously achieved the same recognition in 2008 in connection with a verdict he obtained against Chrysler for $54 million, including $50 million in punitive damages. Mr. Nelson has been court-appointed class counsel in more than two dozen class actions in state and federal courts around the country, and is a frequent lecturer on class action and whistleblower issues. He is a 1987 graduate of NYU School of Law, where he was admitted to the Order of the Coif and was an Articles Editor on the NYU Law Review. Following law school, Mr. Nelson served as a judicial clerk to Judge Stephen Reinhardt on the Ninth Circuit Court of Appeals.
Robert J. Nelson is a partner at Lieff Cabraser and chairs Lieff Cabraser’s False Claims Act practice group. Mr. Nelson …
Michelle L. Rogers is a partner in the Washington, DC office of BuckleySandler LLP. Ms. Rogers represents institutions in a wide range of litigation matters, including government enforcement actions, class action litigation, regulatory examinations, and corporate internal investigations. She currently is representing several financial institutions in ongoing False Claims Act (FCA) and Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) matters. She has also represented clients in matters involving the Program Fraud Civil Remedies Act (PFCRA), Truth in Lending Act, Fair Housing Act, Equal Credit Opportunity Act, Civil Rights Act, and unfair and deceptive trade practices statutes involving the Department of Justice (DOJ), Consumer Financial Protection Bureau (CFPB), Department of Housing and Urban Development (HUD), Federal Housing Finance Agency (FHFA), federal and state bank regulators, and state attorneys general.
Michelle L. Rogers is a partner in the Washington, DC office of BuckleySandler LLP. Ms. Rogers represents institutions in a …
Jennifer M. Wollenberg, a senior associate at Fried Frank and a member of the Firm's False Claims Act and Qui Tam practice group, represents corporations in a variety of complex civil litigation matters, with an emphasis on cases arising under the civil FCA and, in particular, cases involving the financial, aerospace, and defense industries. Ms. Wollenberg has been a contributing co-author of FraudMail Alert®, which regularly reports on significant developments in the FCA arena, and has published articles on various aspects of the FCA. Ms. Wollenberg received her JD from Cornell Law School and is admitted to practice in the District of Columbia, New York, the United States Court of Appeals (Second, Ninth, and District of Columbia Circuits), the United States Court of Federal Claims, and the United States District Court for the District of Columbia.
Jennifer M. Wollenberg, a senior associate at Fried Frank and a member of the Firm's False Claims Act and Qui …
Mark Dostal is a Director at PwC. He has over 32 years of extensive and diversified experience in government contract accounting and auditing, including 8 years with PwC, 8 years with another Big 4 national government contracting practice, and 16 years with the Defense Contract Audit Agency (DCAA). He specializes in the requirements of the Federal Acquisition Regulation (FAR), Agency FAR Supplements, and Cost Accounting Standards (CAS). Mark began his career conducting DCAA audits, directing field office operations, and managing Agency responsibilities at large and medium sized defense contractors from locations in the Midwest, Southwest, and Agency Headquarters. After leaving Federal service, Mark leveraged his unique experiences and relationships to develop consultative approaches with clients that support compliant, yet practical considerations for meeting government contracting and cost accounting practices. He has also assisted many commercial market-based clients with transitioning to and navigating the FAR/DFARS and CAS requirements when entering the federal marketplace. As a member of defense and space industry associations, he actively promotes open dialogue of perspectives and issues affecting industry and senior government acquisition officials. Mark is a Certified Public Accountant in Illinois and Iowa, and member of the American Institute of Certified Public Accountants, National Defense Industrial Association, and National Contract Management Association.
Mark Dostal is a Director at PwC. He has over 32 years of extensive and diversified experience in government contract …
Joe Cheriathundam, a national forensic data analytics leader with the StoneTurn Group, has over 20 years of experience supporting companies and organizations in matters of conflict, change and regulatory compliance, including 15 years with national “Big 4” companies. He has led projects pertaining to the False Claims Act, anti-fraud consulting, anti-money laundering, mergers and acquisitions, investment/trading improprieties, and international business compliance in industries as diverse as finance, retail, life sciences/healthcare, automotive and real estate. Joe recently earned an Advanced Business Analytics Certification from the Kelley School of Business at Indiana University and has frequently written and spoken on the topic of Forensic Data Analytics.
Joe Cheriathundam, a national forensic data analytics leader with the StoneTurn Group, has over 20 years of experience supporting companies …
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About Lieff Cabraser Heimann & Bernstein, LLP
Lieff Cabraser Heimann & Bernstein, LLP, is a sixty-plus attorney AV-rated law firm with offices in San Francisco, New York, and Nashville. Representing plaintiffs in a wide range of federal False Claims Act and other whistleblower cases, Lieff Cabraser has taken on many of the world's largest corporations, holding them accountable for their behavior. Lieff Cabraser also represents plaintiffs in the fields of personal injury and mass torts, securities and financial fraud, employment discrimination and unlawful employment practices, product defect, antitrust and intellectual property, consumer protection, environmental and toxic exposure, and human rights.
About BuckleySandler LLP
With 150 attorneys in Washington, DC, Los Angeles, New York, and Chicago, BuckleySandler is among the leading financial services law firms in the county. Our attorneys have a track record of successfully assisting clients in regulatory, enforcement, litigation, transactional, and public policy matters. Currently, BuckleySandler represents the top 10 largest banks in the United States, nine of the top 10 mortgage lenders, the top 10 mortgage servicers, the top 10 credit card issuers, and numerous community banks and non-bank financial services companies.
About Fried, Frank, Harris, Shriver & Jacobson LLP
From offices located in the world's principal financial centers, Fried Frank, Harris, Shriver & Jacobson LLP's lawyers provide advice to clients regarding their most critical legal and business needs. Fried Frank's False Claims Act attorneys have extensive experience in every facet of the civil False Claims Act, and have been on the cutting edge of litigation and debate about the FCA's interpretation and scope. The Firm regularly represents financial industry, defense, health care, and other government contractors in high stakes cases. The Firm's False Claims Act practitioners also assist and represent entities not normally associated with federal and state fraud investigations, such as municipal airport authorities, computer manufacturers, private and state universities, academic medical centers, import and export companies, major accounting and consulting firms, magazine publishers, and oil and gas exploration companies.
About PwC US PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms in 158 countries with more than 180,000 people. We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US
About PwC's Forensic Services PwC Forensic Services team of experienced professionals is dedicated to meeting the challenges caused by fraud allegations, financial crimes and other irregularities. Our portfolio of services includes: Financial Crime Examinations, Forensic Technology Solutions, Regulatory Compliance Reviews, Fraud Risk Management and Fraud Prevention, Dispute Analysis and Litigation Support. The Forensic Services team also manages the PwC Fraud Forum, an exclusive community where members can gain knowledge, participate in events and share important insights on preventing, detecting and investigating fraud, corruption and economic crime. See www.pwc.com/us/forensics andhttps://usfraudforum.pwc.com for more information.
About Stone turn group
StoneTurn is a partnership of experienced accountants, economists, and financial and technology consultants supporting corporate and individual clients and their advisors, engaged in the most challenging and complex business transactions, disputes and financial investigations. Our work ranges from behind-the-scenes advice, to deep financial analysis, to full service dispute resolution support.