Any company that does business with the federal government – no matter how much or how little – must be aware of the federal False Claims Act (FCA). The FCA prohibits falsely billing the government and provides for civil sanctions that can be devastating to a company — up to three times the damages as well as penalties for each false claim. Since the 1986 amendments to the FCA, the government has increasingly used the statute to generate billions of dollars from settlements and judgments. In the last 15 years, the Department of Justice has recovered an average of $3.5 billion per year, with the total recovery between 2009 and 2023 of more than $53 billion. Additionally, the government often uses a company's FCA violation as the basis for suspension and/or debarment from government contracting, which means the company will not be awarded any new government contracts nor will existing government contracts be renewed. And, perhaps most concerning, FCA investigations are at times worked in parallel with civil and criminal components of the DOJ. That means a civil matter can quickly turn into a criminal one, with the risk of prison time for employees. There are 93 U.S. Attorneys in the United States charged with enforcing federal criminal and civil laws. In each office, there is a team of lawyers who review each FCA claim for criminal prosecution, civil enforcement, or both. Understanding this process is critical to the early resolution of an FCA investigation to avoid criminal prosecution and/or civil fines and penalties.

The federal government is particularly focused on bringing FCA cases in the healthcare industry. Since 2007, the U.S. Department of Justice has deployed Healthcare Fraud Strike Forces (comprised of prosecutors and investigators) throughout the country to target regions where healthcare fraud investigations are warranted. In the healthcare area, the Federal Bureau of Investigations has committed significant resources, including agents and analysts to FCA enforcement and more broadly, healthcare fraud. Healthcare-related FCA recoveries for the 2009 to 2023 period average $2.5 billion per year with a total recovery of just under $38 billion. Given the federal government’s involvement in almost every aspect of healthcare, it is not surprising that this area continues to serve as a target-rich environment for federal prosecutors and regulators. Individual whistleblowers often bring FCA claims on behalf of the government. These suits are called qui tam suits and, if successful, the whistleblower is entitled to receive up to 30% of the amount recovered by the government. This provides tremendous incentive for individuals to file their own suits, often without even going through the company's compliance procedures. In addition, whistleblowers often bring retaliation claims with the qui tam suit.

As a general compliance tool for companies, the Firm has compiled a Whistleblower Litigation Mitigation Checklist, recommending proactive steps a company can take to avoid becoming subject to a whistleblower complaint. Our team appreciates working closely with our clients to customize emerging best practices and practical approaches to minimize their risk profile – ranging from policy adoption, to personnel training, to standardizing internal investigation pathways and protocols. Each company has a unique culture, history, and lifecycle that our team will intimately get to know to provide nuanced and commercially minded recommendations.

The Firm's white collar, healthcare, government contracts and litigation attorneys have extensive experience in investigating, defending and negotiating claims under the FCA. These attorneys ensure that the company works proactively with the relevant government officials from the outset while at the same time investigating the claims thoroughly to marshal any defenses. For cases in which the complaint has already been filed, they litigate aggressively to try to dismiss it as early as possible. Moreover, our attorneys have experience in protecting against follow-on claims by state and local governments pursuant to their own false claims statutes and for any shareholder litigation that may result.